Compound Interest Calculator — With Monthly Contributions
Compound interest means you earn interest on your interest — small amounts become surprisingly large given time. Enter a starting amount, an optional monthly contribution, your expected annual rate and the number of years, and see exactly where your money ends up and how much of it is pure growth.
Assumes a constant rate and contributions made at the end of each month. Real returns vary year to year.
How to use this tool
- Enter your starting amount — or 0 if you're starting from scratch with monthly savings.
- Add a monthly contribution if you'll keep saving regularly (this is where compounding really shines).
- Set your expected annual rate — e.g. a savings account rate, or a long-term stock-market average.
- Pick the period and press Calculate to see the final balance and how much of it is pure interest.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is paid only on your original amount. Compound interest is paid on your original amount plus all previously earned interest — so growth accelerates over time. Over 20+ years the difference is enormous: it's why starting early matters more than starting big.
What rate should I use for the calculation?
Use the actual quoted rate for savings accounts or fixed deposits. For long-term stock market investing, many planners model 6–8% per year as a rough historical average — but markets are volatile and past averages guarantee nothing.
Does compounding frequency really matter?
It matters less than people expect. The gap between monthly and yearly compounding at the same quoted rate is small — a fraction of a percent per year. The variables that dominate are the rate, the time, and how much you contribute.
What is the rule of 72?
A quick mental shortcut: divide 72 by your annual rate to estimate how many years it takes money to double. At 8%, money doubles roughly every 9 years — so in 27 years, one amount becomes eight.
Should I account for inflation?
Yes, for honest long-term planning. If your investments earn 8% and inflation runs at 3%, your real growth is about 5%. Run this calculator with the reduced rate to see your future balance in today's purchasing power — or use our inflation calculator.