Compound Interest Calculator

What compound interest does

With compound interest you earn interest on your interest. Each period the rate applies to the whole balance — your deposits plus everything they have already earned — so growth speeds up over time. The chart shows the two parts separately: the blue band is money you put in, the amber band is interest.

Three things drive the result: the rate, the time and how much you keep adding. Time matters most. At 7 % a year, money doubles roughly every ten years (the "rule of 72": 72 ÷ 7 ≈ 10.3), so the last decade of a 30-year plan adds more than the first two together.

Worked example

Start with 10,000, add 200 a month for 20 years at 7 % compounded monthly. You contribute 58,000 in total and the balance reaches about 144,573, so roughly 86,600 is interest. Without the monthly deposits, the 10,000 alone grows to about 40,387.

Compounding frequency matters less than people think: 7 % compounded daily instead of monthly adds well under 1 % to the final balance.

Each month the balance earns the monthly equivalent of the stated rate, then the contribution is added:

r_m = (1 + r/n)^(n/12) − 1
balance_{m+1} = balance_m × (1 + r_m) + contribution

Here r is the annual rate and n the compounding periods per year. With no contributions this reduces to the textbook formula A = P(1 + r/n)^(n·t). Results are rounded to the cent; the effective annual rate is (1 + r/n)^n − 1.