Compound Interest Calculator
Project how much your savings will grow with monthly contributions and compounding returns — live chart of balance, contributions, and interest over time.
Your scenario
Sliders update the chart live.
- Your contributions29.1%
- Compound interest70.9%
Compounding is the closest thing to a free lunch in finance. Your earnings earn earnings, and over decades the curve gets steep enough that most of your final balance never came from your own pocket — it came from interest on top of interest. This calculator shows you that curve for any starting amount, contribution rate, return assumption, and time horizon.
Two numbers worth watching: the gap between the green “total contributed” line and the indigo “balance” line in the chart, and the pie below it. Both visualise the same idea — how much of the final number came from you versus from compounding.
How the formula works
Compounding with monthly contributions is the future-value-of-an-annuity formula. Let P be your starting balance, PMT the monthly contribution, r the monthly return (annual ÷ 12), and n the number of months:
FV = P(1+r)n + PMT × [((1+r)n − 1) / r]
The first half is the growth of your initial deposit. The second half is the growth of each monthly contribution as it compounds for whatever time remains. The calculator above applies this monthly and lets you watch the curve form.
What return rate should you use?
- Cash / high-yield savings: 4–5% nominal in normal rate environments, 0–1% real after inflation.
- Bonds: 4–6% nominal, 1–3% real.
- S&P 500: ~10% nominal, ~7% real long term — with major drawdowns along the way.
- Diversified portfolio (60/40): ~7–8% nominal, ~5% real.
Use real (inflation-adjusted) returns if you want the final number in today’s purchasing power. Use nominal if you’re comparing to a future dollar figure. People mix these up constantly — the difference over 30 years is enormous.
The early-start lesson
Two people both invest a lifetime total of $100,000. Person A invests $10,000/year for the 10 years from age 25 to 35, then stops contributing forever. Person B invests $2,500/year for the 40 years from age 25 to 65. At 8%, Person A ends up with more money — despite contributing the same amount, because their dollars had longer to compound. This is what people mean when they say time in the market beats timing the market.
What this calculator does not include
- Taxes. Inside an IRA or 401(k), growth is tax-deferred or tax-free. In a taxable account, dividends and realised gains are taxed annually.
- Fees. A 1% expense ratio can eat 25% of a 30-year balance compared to a 0.05% index fund. Use net-of-fee returns if you want realism.
- Sequence of returns. Real markets don’t return a smooth average — they crash, rally, sit flat for a decade. The final balance is similar but the path is bumpy.
When to consult a professional
A fee-only fiduciary (look for NAPFA-listed planners) can help you pick the right account type (Roth vs traditional, taxable vs tax-advantaged) and the right asset allocation for your risk tolerance. They charge by the hour or by AUM, but for major decisions like college funding or pre-retirement income planning, the math is usually worth it.
Frequently asked
+Is monthly compounding realistic?
For most index funds and ETFs, dividends actually compound quarterly or upon reinvestment. Monthly is a close enough approximation for projection purposes — you’d see less than 0.1% difference vs daily compounding in a 30-year scenario.
+Why is my real account behind this projection?
Three likely reasons: fees you didn’t account for (expense ratios + advisor fees), a real return below the assumed rate (markets had a bad decade), or you contributed less than you planned. Markets revert to long-term averages over 20+ year windows but rarely match in any given decade.
+Should I include my home equity in this calculation?
No. Home equity compounds differently — partly via principal paydown, partly via appreciation, and not nearly as predictably. Treat it as a separate line item if you’re doing net-worth projections.
+How do taxes change the picture?
Inside a Roth IRA or Roth 401(k): no change — withdrawals are tax-free. Inside a traditional IRA/401(k): subtract your future tax bracket from the final number (e.g. 25% gone if you retire in the 25% bracket). In a taxable account: subtract maybe 1–2% per year from the assumed return to account for dividend tax drag.
+What if I can only contribute irregularly?
The math still works — divide your annual contributions by 12 to get an effective monthly figure. Lumpy contributions slightly underperform a smooth schedule because your money sits in cash longer, but the difference over decades is small.
+Is 8% return realistic for the future?
Historically, US large caps returned around 10% nominal / 7% real since 1928. Many serious researchers (Vanguard, Research Affiliates) expect lower future returns due to high current valuations — 5–7% nominal is a more conservative planning assumption.
Disclaimer. This calculator gives an estimate, not financial advice. Verify any major decision with a qualified professional. Last updated June 2026.