Does this calculator account for inflation?

No. It uses the nominal rate you enter. To see your real gain, use our Real Return calculator or enter an inflation-adjusted (real) rate here.

Can I use this for savings accounts, ETFs, and bonds?

Yes — just enter the expected annual return rate. Keep in mind that ETFs and bonds may have management fees or taxes on gains, which this calculator does not deduct.

What is the real effect of increasing my monthly contribution?

It's enormous over time. Adding $200 more per month at 8% annual return over 20 years can add more than $120,000 to your final balance. Small, consistent increases beat sporadic large deposits.

Why does the balance grow so much faster near the end?

This is the snowball effect of compound interest. In early years most growth comes from contributions; in later years, the accumulated balance generates more interest than your monthly contributions — producing the characteristic exponential curve.

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Compound Interest Calculator

See exactly how your money grows with compound interest and monthly contributions — with a full step-by-step breakdown.

Compound interest means your earnings generate their own earnings. With monthly contributions at 8% annual return, $10,000 grows to over $60,000 in 20 years — and adding just $200/month turns that into nearly $180,000. This free calculator shows the full picture instantly.

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Initial amount · Monthly contributions · Annual rate · Time horizon

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Your inputs

Initial amount (optional)

Monthly contribution

Annual interest rate — e.g. 7 for 7%

% /yr

Time period

years

Compounding frequency

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Results

Initial amount

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Total contributions monthly deposits over the period

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Interest earned the power of compounding

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Return on invested capital

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Final balance

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Balance growth over time

Interest earned Contributions Initial amount

How it's calculated

The compound interest formula

Compound interest means you earn interest on your interest. Unlike simple interest (which pays only on the principal), compound interest reinvests your earnings each period — creating exponential growth over time.

A = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) − 1) / (r/n)] Where: P = initial principal r = annual interest rate (decimal) n = compounding periods per year t = time in years PMT = monthly contribution

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Convert annual rate to period rate
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Grow initial principal
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Add future value of contributions
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Final balance
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Compound interest: Interest calculated on the initial principal and also on the accumulated interest from previous periods.
Principal: The initial amount invested or saved, before any interest is earned.
Compounding frequency: How often interest is calculated and added to the balance — monthly compounding grows faster than annual.
PMT (Payment): A regular periodic contribution added to the investment at the beginning of each period.
Real return: The return after adjusting for inflation. If your account earns 8% but inflation is 3%, your real return is roughly 4.85%.

Disclaimer: this is an estimation tool for planning purposes. It assumes a constant rate of return and does not account for taxes on earnings, management fees, or inflation. Actual results will vary.

Frequently asked questions

Is 1% per month the same as 12% per year?

No. Because interest compounds, 1% per month equals (1.01)^12 − 1 ≈ 12.68% per year. This calculator always converts the annual rate you enter into the correct period rate before computing.

Why do small monthly contributions make such a big difference?

Each contribution immediately starts earning compound interest on its own. The earlier money enters the account, the more compounding periods it gets. Over 20+ years, monthly contributions often contribute more to the final balance than the original principal.

Does this account for inflation or taxes?

No — it uses the nominal rate you enter. For a real (inflation-adjusted) return, use our Real Return calculator. For after-tax results, subtract your marginal tax rate from the nominal rate as an approximation.

What rate should I use for the stock market?

The S&P 500 has historically returned around 10% per year nominal (about 7% after inflation). For a diversified global portfolio, 6–8% is a reasonable long-term planning assumption. Past performance does not guarantee future results.

Monthly vs. annual contributions — does it matter?

Yes. Monthly contributions outperform annual lump sums because money enters the compounding cycle earlier each year. The difference can reach 5–8% more in total balance over 20+ years.

Can I use this for retirement planning?

Yes. Set the final balance as your retirement target (e.g., the amount that generates your desired passive income at 4% withdrawal rate), then adjust the monthly contribution until you hit the goal. Pair it with our FIRE Calculator for a complete picture.

About this calculator

This compound interest calculator covers the standard FV formula used in financial planning worldwide. It supports both lump-sum investments and periodic contributions (annuity), with configurable compounding frequency (daily, monthly, quarterly, semi-annual, annual).

The calculator does not pre-fill any country-specific interest rates — enter the rate that matches your investment vehicle (savings account, ETF expected return, bond yield, etc.).