Compound Interest Calculator
Compound interest means you earn interest on your interest. $10,000 at 7% for 20 years with no deposits grows to about $40,400 with monthly compounding.
Final balance
$144,573
You put in
$58,000
Interest earned
$86,573
Each bar is one year. Hover a bar for the balance.
Show the math
- 1
Start with your inputs
Start $10,000 · add $200/month · 7% a year · 20 years
Interest is added every month, and new interest also earns interest. That is compounding.
Read the steps as text
- Start with your inputs. Start $10,000 · add $200/month · 7% a year · 20 years Interest is added every month, and new interest also earns interest. That is compounding.
- Convert the yearly rate to a monthly rate. 7% ÷ 100 ÷ 12 = 0.00583333
- Month 1: interest on the starting balance. $10,000.00 × 0.00583333 = $58.33
- Month 1: add interest and the monthly deposit. $10,000.00 + $58.33 + $200.00 = $10,258.33 Every following month repeats this, starting from the new, larger balance.
- After year 1 (12 months). $12,400.00 put in → balance $13,201.42 Interest earned so far: $801.42
- After year 10. $34,000.00 put in → balance $54,713.58 Interest is now 37.9% of the balance and is growing faster each year.
- After year 20: the result. $58,000.00 put in + $86,572.72 interest = $144,572.72 Interest made up 59.9% of your final balance.
How compound interest is calculated here
Each month the calculator takes your balance, adds one twelfth of the yearly rate as interest, then adds your monthly deposit. The new balance is the starting point for the next month, which is why growth speeds up over time.
The chart shows your own money (deposits) in one colour and interest in another, so you can see the moment interest starts doing more of the work than you do.
Formula
Without deposits: A = P × (1 + r/12)^(12 × t), where P is the starting amount, r is the yearly rate as a decimal and t is the number of years. With deposits, the calculator repeats the monthly step so the result is exact rather than an approximation.
Frequently asked questions
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the original amount. Compound interest is calculated on the original amount plus all interest already earned.
- Does starting earlier matter more than saving more?
- Often yes. Because growth builds on itself, extra years at the start usually add more than the same money added late. Try changing the years slider to see it.
- Are these results guaranteed?
- No. Real investments rise and fall, and fees and taxes reduce returns. This tool shows a steady-rate illustration, not a forecast.