Compound Interest Calculator with Monthly Deposits

How to use this tool

Enter your starting amount

Type what you're starting with. It can be $0 if you're only making monthly deposits.

Add deposits, rate and time

Enter your monthly contribution, the yearly interest rate and the number of years. Pick how often interest compounds.

See the growth

The final balance, total deposits and interest earned update as you type, with a bar for each year.

Example

Saving $200 a month on top of $10,000 for 20 years.

Input

Starting amount: $10,000
Monthly contribution: $200
Interest rate: 7% a year, compounded monthly
Time: 20 years

Result

Balance after 20 years: $144,572.72
Total you put in: $58,000
Interest earned: $86,572.72
Balance after 10 years: $54,713.58

The second decade adds almost $90,000, far more than the first, even though the deposits are the same. At 7% money doubles about every 10.2 years, which is the hint under the rate field.

How compound interest works

Simple interest only pays you on the money you put in. Compound interest also pays you on the interest you've already earned. Each period, the interest is added to your balance, and the next period's interest is calculated on that bigger amount.

Over short periods the difference is small. Over decades it's enormous, which is why the chart curves upward: in the later years, interest earns more than your deposits add.

The formula

For a single deposit, the future value is A = P × (1 + r/n)^(n×t), where P is the starting amount, r the yearly rate, n how many times a year interest compounds, and t the number of years. $10,000 at 5% compounded monthly for 10 years grows to about $16,470.

Regular deposits are added month by month on top of that. $100 a month at 6% compounded monthly for 10 years grows to about $16,388, of which $12,000 is your own money.

Tips to grow your money faster

Start early: time matters more than the amount. Ten extra years of compounding can double the result.
Automate deposits: a fixed monthly transfer is easier to keep up than one-off saving.
Mind the fees: a 1% yearly fee comes straight off your rate and compounds against you.
Use tax-advantaged accounts: in the US, a 401(k) or IRA lets growth compound without yearly tax drag.
Rule of 72: divide 72 by your rate to estimate how many years it takes to double. At 8%, about 9 years.

A note on returns

Savings accounts and CDs pay a stated rate. Stock market returns aren't fixed: they've averaged higher over long periods but swing a lot from year to year, and past returns don't guarantee future ones. Use a conservative rate when planning, and treat the result as an estimate, not a promise.

What regular saving adds up to

Monthly deposits at a 7% yearly return, compounded monthly. These are illustrations, not promises; real returns go up and down.

$100 a month for 30 years: about $122,000, from $36,000 of deposits.
$300 a month for 30 years: about $366,000.
$300 a month for 40 years: about $787,000. Ten more years more than doubles the result.
$500 a month for 30 years: about $610,000, from $180,000 of deposits.

Simple interest vs compound interest

Simple interest is worked out on the original amount only: $10,000 at 5% earns $500 every year, so $15,000 after 10 years. Compound interest adds each period's interest to the balance first. The same $10,000 at 5% compounded monthly ends at about $16,470, $1,470 more, and the gap widens every year.

Loans work the same way in reverse. Credit card balances compound against you, which is why paying them off usually beats any savings rate.

Common errors

Entering the rate as a decimal

Type 7 for 7%, not 0.07. A rate of 0.07% barely grows at all, which is a quick way to tell something's off.

Putting a yearly deposit in the monthly box

The contribution is added every month. If you save $2,400 a year, enter 200.

Leaving both amounts at zero

With no starting amount and no monthly contribution there's nothing to grow, so no result shows. Fill in at least one.

Reading the result as a promise

Market returns move around from year to year, so a fixed rate is an average. Run a cautious case too, such as 5%, before you plan around the number.

Frequently asked questions

How do I calculate compound interest?

Use A = P × (1 + r/n)^(n×t). This calculator does it for you, including monthly contributions, and shows how much of your final balance is interest.

How much will $10,000 grow in 10 years?

At 5% compounded monthly, about $16,470. At 7%, about $20,097. Enter your own numbers to see the exact figure.

Does compounding frequency matter?

A little. More frequent compounding earns slightly more: $10,000 at 5% for 10 years grows to $16,289 compounded yearly and $16,470 compounded monthly. Daily is only a few dollars more than monthly.

What's the difference between APR and APY?

APR is the stated yearly rate. APY includes the effect of compounding, so it's a little higher. A 5% APR compounded monthly is about a 5.12% APY.

When are monthly contributions added?

At the end of each month, after that month's interest. This is the standard assumption for savings plans.

How much do I need to save to reach $1 million?

At a 7% yearly return compounded monthly, about $820 a month for 30 years, or about $381 a month for 40 years. At 5% for 30 years it's about $1,202 a month. Enter your own timeline to see your number.

What is the Rule of 72?

A shortcut for doubling time: divide 72 by the yearly interest rate. At 6%, money doubles in about 12 years; at 9%, about 8 years.

Compound Interest Calculator