Compound Interest Calculator

See what a starting balance and regular monthly contributions grow to at a given annual rate, and how much of the final amount is your own money versus compound growth.

How the calculation works

The calculator works month by month. Each month the balance is multiplied by (1 + annual rate / 12) and then the contribution is added, so interest compounds monthly and deposits are made at the end of each month. In closed form this is the future value formula FV = P₀ × (1 + i)ⁿ + PMT × ((1 + i)ⁿ − 1) / i, where P₀ is the initial amount, PMT the monthly contribution, i the monthly rate and n the number of months.

Inputs: initial amount (up to $2,000,000), monthly contribution (up to $50,000), annual return from 1% to 30%, and a term from 1 to 30 years in one-year steps. Results: future value, total contributed, total earnings, growth versus contributions (earnings as a percentage of everything you put in), and the annual return (IRR).

The annual return is a money-weighted return (IRR): the calculator finds the rate at which your initial amount and each contribution, invested in its own month, grow to exactly the final balance, then annualizes it. Contributions are not counted as growth, so the figure is not inflated by deposits; with monthly compounding it equals the effective annual rate, about 8.30% for an 8% nominal rate.

Worked example

Start with $10,000, add $500 a month, earn 8% a year for 20 years. The balance reaches about $343,778. You contributed $10,000 + $500 × 240 = $130,000, so compound growth added $213,778, a 164.4% growth versus contributions, while the annual return (IRR) is 8.3%. Leave everything the same but stretch the horizon to 30 years and the balance becomes about $854,537 on $190,000 of contributions.

Things to keep in mind

• Use the rule of 72 as a sanity check: at 8%, money roughly doubles every 72 / 8 = 9 years.
• Compounding is monthly. Daily compounding at the same nominal rate adds very little (8.33% vs 8.30% effective at 8%), so the frequency matters far less than the rate and the time horizon.
• Results are nominal and pre-tax. Subtract expected inflation from the rate to see purchasing power, and remember that taxes and fund fees reduce the effective return unless the money sits in a tax-advantaged account.
• A fixed rate is a simplification. Stock returns vary from year to year, so test a lower rate to see a cautious outcome.