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Calcora

Saving and investing

Compound Interest Calculator

See how an initial investment and monthly contributions could grow with compound interest, and how much of the balance comes from growth.

Your savings plan

Enter what you start with, what you add each month, and the rate and period you want to assume.

What you start with. Leave blank for $0.

Added at the end of each month. Leave blank for $0.

The yearly rate you want to assume. It is not a guaranteed return.

Investment period unit

How long the money grows, in years or months.

Compounding frequency

How often earned interest is added to your balance.

Private by design

Your initial investment, contributions, rate, and investment period stay in your browser and are not sent to Calcora.

How this compound interest calculator works

  1. Enter your starting point

    Add what you invest today and what you plan to add each month. Either one can be $0.

  2. Interest is earned every month

    Each month, the balance at the start of the month earns interest at the annual rate divided by 12.

  3. Interest is added on each compounding date

    Every month, quarter, or year, depending on the compounding you choose, the interest earned so far is added to the balance. From then on it earns interest too.

  4. See what built the balance

    The result splits the ending balance into what you contributed and the estimated growth, and shows how larger contributions would change it.

Understanding compound interest

What is compound interest?

Interest calculated on a balance that already includes earlier interest. Each time interest is added, the next interest is figured on a larger amount, so growth builds on itself.

Contributions vs compound growth

A balance has two sources: the money you put in and the growth it earns. Early on, contributions make up most of the balance. Given enough time, growth can become the larger part.

The rate is an assumption

The rate you enter is held constant for the whole period. Real savings rates change, and investment returns vary from year to year and can be negative, so the result is a scenario, not a forecast.

Example compound interest calculation

$10,000 to start and $500 a month at 7%, compounded monthly, for 20 years. Calculated the same way as the calculator above.

Where the balance comes from

Initial investment
$10,000.00
Monthly contributions
240 × $500.00 = $120,000.00
Total contributions
$130,000.00
Estimated growth
$170,850.70
Ending balance
$300,850.70

Estimated growth makes up 57% of the ending balance. Interest is earned on earlier interest as well as on contributions, so growth speeds up as the balance gets larger.

The formula

Balance equals P times 1 plus r to the power of n, plus C times 1 plus r to the power of n minus 1, divided by r.

P, the initial investment
$10,000.00
C, the monthly contribution
$500.00
r, the monthly rate
7% ÷ 12
n, the number of months
240

This is the standard formula for monthly compounding with contributions at the end of each month. The calculator works month by month and rounds interest to the cent each time it is added, so its result can differ from the formula’s by a few cents.

Why time matters

The same plan, $10,000 to start and $500 a month at 7%, compounded monthly, over different periods.

Total contributions, estimated growth, ending balance, and growth’s share of the balance for each period
PeriodTotal contributionsEstimated growthEnding balanceGrowth’s share
10 years$70,000.00$36,639.03$106,639.0334%
20 years$130,000.00$170,850.70$300,850.7057%
30 years$190,000.00$501,150.46$691,150.4673%
40 years$250,000.00$1,225,520.80$1,475,520.8083%

Contributions grow in a straight line with time. Growth compounds: each year it is earned on a larger balance, so the longer the money stays invested, the larger the share of the balance that comes from growth rather than from what you put in.

How compounding frequency affects growth

Compounding frequency is how often earned interest is added to your balance: every month, every quarter, or once a year. The more often it is added, the sooner it starts earning interest of its own, so at the same annual rate the balance grows a little faster.

The difference is real but modest compared with the effect of the rate, the amounts, and the time. It is smaller at lower rates and over shorter periods.

Ending balance, estimated growth, and the difference from annual compounding, for the example plan over 20 years
CompoundingEnding balanceEstimated growthMore than annual
Annually$292,561.44$162,561.44—
Quarterly$299,257.85$169,257.85+$6,696.41
Monthly$300,850.70$170,850.70+$8,289.26

The example plan over 20 years. Daily compounding, common for savings accounts, grows almost exactly like monthly compounding, so monthly is a close stand-in for it.

Assumptions

  • The annual rate you enter stays the same for the entire period. It is an assumption, not a forecast: real savings rates change, and investment returns vary from year to year and can be negative.
  • Each month earns interest at the annual rate divided by 12, on the balance at the start of the month.
  • Interest is added to the balance on each compounding date: every month, every 3 months, or every 12 months. Interest earned between those dates does not earn interest itself until it is added. If the period ends between compounding dates, the interest earned since the last one is added at the end.
  • The initial investment is made at the start. Monthly contributions are added at the end of each month, starting one month later, so a contribution earns nothing in the month it is added.
  • Interest is rounded to the nearest cent, with halves rounded up, each time it is added to the balance.
  • No taxes, fees, inflation, or withdrawals are included.
  • Results are estimates for education, not a forecast, a guarantee, or investment advice.

How Calcora calculates

  • Every calculator explains the formula behind its result in plain language.
  • Calculators are designed to run in your browser, so your inputs are not sent to Calcora.
  • Results help you understand your options. They are not financial advice.
Read the methodology

Frequently asked questions

How is compound interest calculated?
Each month, the balance earns interest at the annual rate divided by 12. On each compounding date, that interest is added to the balance, so later interest is calculated on a larger amount. With monthly compounding and contributions at the end of each month, the result follows the standard future value formula, balance = P × (1 + r)^n + C × ((1 + r)^n − 1) ÷ r, where P is the initial investment, C the monthly contribution, r the annual rate divided by 12, and n the number of months. Rounding interest to the cent can move the result by a few cents.
What is the difference between contributions and growth?
Contributions are the money you put in: your initial investment plus every monthly contribution. Growth is the rest of the ending balance: the interest earned on your money, including interest on earlier interest. The calculator shows each part and its share of the balance.
When are monthly contributions added?
At the end of each month, starting one month after your initial investment. A contribution starts earning interest the month after it is added, so the last one, added at the end of the period, earns nothing. Contributing at the start of each month instead would give a slightly larger balance.
How much does compounding frequency matter?
Less than the rate, the amounts, or the time. More frequent compounding adds interest to the balance sooner, so the balance grows a little faster at the same annual rate. The comparison on this page shows monthly, quarterly, and annual compounding for the same plan.
Should I enter an APY or an interest rate?
The calculator treats the rate you enter as an annual rate compounded at the frequency you choose. Savings accounts often quote an annual percentage yield (APY), which already includes compounding. If you only know the APY, enter it with annual compounding, which treats it as the balance’s yearly growth.
Is the growth guaranteed?
No. The calculator applies the rate you enter, unchanged, for the whole period. That is a simplifying assumption, not a prediction. Savings rates change over time, and investment returns vary from year to year and can be negative. Taxes, fees, and inflation are not included.
Does Calcora store my information?
No. The calculation runs in your browser. Your initial investment, contributions, rate, and period are not sent to Calcora or saved, and they are cleared when you leave or reload the page.

Related calculators

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