Compound interest calculator

Add a starting balance, a monthly contribution, an annual return and a time horizon to see how much of the final balance is money you contributed and how much is growth.

How this calculator works

Compound interest means the interest you earn starts earning interest too. With monthly compounding, each month's return is added to the balance and the next month compounds on the new, larger amount. Over long periods that snowball does most of the work: the contributions line grows in a straight line, while the growth line curves upwards.

The monthly contribution is what makes the curve steep. Contributions are added at the end of each month in this model, which is slightly conservative compared with contributing at the start of the month. The annual return is treated as a constant rate — real markets do not deliver a smooth 7% every year, so treat the result as an average-case projection, not a promise.

The formula

With monthly rate r = annual return ÷ 12 ÷ 100, n months and monthly contribution C:

The first term compounds the starting balance; the second is the future value of an ordinary annuity, i.e. the monthly contributions. Contributions are P + C × n and growth is the difference.

Worked example

Starting with 10,000 and adding 500 a month at 7% for 10 years produces a balance of $106,639. You contributed $70,000 of that; the remaining $36,639 is compound growth.

Common mistakes

• Using an average return as a guarantee. A 7% average can include long stretches of losses. Projection tools answer “what if”, not “what will happen”.
• Forgetting fees. A 1% annual fee on a 7% return removes about 14% of the final balance over 30 years because it compounds against you too.
• Ignoring inflation. Nominal growth is not purchasing power. At 3% inflation, a balance that looks like it doubled buys about 40% less than it appears.