Compound Interest Calculator with Monthly Contributions
Watch a starting balance plus regular contributions grow, with the split between what you put in and what interest did for you.
Updated October 2026
Year by year
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| 1 | $13,000 | $821 | $13,821 |
| 2 | $16,000 | $1,918 | $17,918 |
| 3 | $19,000 | $3,312 | $22,312 |
| 4 | $22,000 | $5,023 | $27,023 |
| 5 | $25,000 | $7,074 | $32,074 |
| 6 | $28,000 | $9,491 | $37,491 |
| 7 | $31,000 | $12,300 | $43,300 |
| 8 | $34,000 | $15,528 | $49,528 |
| 9 | $37,000 | $19,206 | $56,206 |
| 10 | $40,000 | $23,368 | $63,368 |
| 11 | $43,000 | $28,047 | $71,047 |
| 12 | $46,000 | $33,281 | $79,281 |
| 13 | $49,000 | $39,110 | $88,110 |
| 14 | $52,000 | $45,578 | $97,578 |
| 15 | $55,000 | $52,730 | $107,730 |
| 16 | $58,000 | $60,616 | $118,616 |
| 17 | $61,000 | $69,289 | $130,289 |
| 18 | $64,000 | $78,806 | $142,806 |
| 19 | $67,000 | $89,227 | $156,227 |
| 20 | $70,000 | $100,619 | $170,619 |
How compound interest works
Simple interest pays you on the original amount only. Compound interest pays you on the original amount plus every dollar of interest already earned. Over a few years the difference is small; over 20–30 years it is enormous, which is why starting early matters more than the exact rate.
The formula for a lump sum is A = P(1 + r/n)^(nt): P is the starting amount, r the annual rate as a decimal, n the compounding periods per year, and t the years. Regular contributions are added on top each period, which is what the calculator simulates month by month.
Does compounding frequency matter?
Less than people think. $10,000 at 7% for 20 years grows to about $38,700 with annual compounding, $40,400 with monthly, and $40,550 with daily. The jump from annual to monthly is worth having; from monthly to daily it is pocket change. The effective annual yield shown above is the true yearly rate after compounding, which is the number to compare across savings accounts (banks call it APY).
What rate should you use?
- High-yield savings / money market: 3.5%–5% in recent years, but it moves with Federal Reserve policy.
- Certificates of deposit: similar to savings, fixed for the term.
- US stock market (S&P 500): about 10% per year nominal long-term average, roughly 7% after inflation, with big swings year to year.
- Balanced 60/40 portfolio: historically 6%–8% nominal.
For long-term planning, 6%–7% is a common conservative assumption for a diversified stock portfolio. Enter an inflation rate (2%–3% is the long-run US average) to see the result in today's purchasing power.
The rule of 72
Divide 72 by the annual rate to estimate how many years money takes to double. At 6% that's 12 years; at 9% it's 8 years. It is a mental-math shortcut, accurate to within a year or so for rates between 4% and 12%.
Frequently asked questions
What is the difference between APR and APY?+
APR is the simple annual rate. APY (annual percentage yield) includes the effect of compounding within the year, so it is slightly higher. Banks advertise APY on savings accounts; this calculator shows it as the effective annual yield.
Should contributions be at the start or end of the period?+
Contributing at the start of each month earns one extra month of interest per contribution. Over decades that adds up, but the difference is usually under 1% of the final balance. Match how your account actually works.
Does this account for taxes?+
No. Interest in a regular savings or brokerage account is taxed each year; growth in a 401(k), IRA, or HSA is tax-deferred or tax-free. For taxable accounts, reduce the rate by your marginal tax rate for a rough after-tax estimate.
Why is my interest earned larger than my contributions?+
That is compounding doing its job. Once the balance is large enough, the interest it generates each year exceeds what you add. With a 7% return and steady contributions, the crossover typically happens between year 12 and year 18.