Compound Interest Calculator
See how your money grows over time with the magic of compounding. Adjust your starting amount, monthly contributions, rate, and time horizon.
Inputs
How to use this calculator
1. Set your starting point
Enter your initial deposit and any planned monthly contribution. The two work together — even a modest monthly contribution can outpace a larger lump sum over decades.
2. Pick a realistic rate and horizon
Enter the nominal (headline) return you expect — roughly 8-10% for a long-run stock allocation, 5-7% for a diversified stock-and-bond mix, 4-5% for savings accounts and CDs. Don't subtract inflation yourself: the inflation field handles that and reports the today's-dollars figure separately. The longer the horizon, the more compounding dominates.
3. Choose a compounding frequency
Annually, semi-annually, quarterly, monthly, or daily. The jump from annual to monthly is meaningful; from monthly to daily is tiny.
4. Read the balance in today's dollars
Set the inflation rate you expect, then flip "Show real (today's dollars)" to swap the headline between the nominal balance you'll actually see on a statement and what that balance will buy in today's terms. The dashed line on the balance chart tracks the same thing year by year.
Why time matters more than amount
Doubling your contribution roughly doubles your final balance. Doubling your time horizon can quadruple it or more, because each new year compounds on everything that came before.
About compound interest
What is compound interest?
Interest earned on both your original deposit and the interest already accrued. Over long horizons, this snowball effect can dwarf the original principal.
Formula
For a one-time deposit: A = P(1 + r/n)nt. With monthly contributions added at period end: FV = PMT × ((1+i)k−1)/i, where i is the periodic rate and k is the number of periods.
How often does compounding really matter?
The jump from annual to monthly compounding is meaningful; from monthly to daily it's tiny. Time horizon and contribution discipline matter far more than frequency.
Nominal vs. real (today's dollars)
The nominal balance is the number that will show up on your statement. The real balance is what it will buy, measured in today's prices. Divide by (1 + inflation)years to convert: $1,000,000 thirty years out, with 3% inflation, buys roughly what $412,000 buys now. Both numbers are true — the nominal one tells you the account balance, the real one tells you the lifestyle.
Should I use a real rate or a nominal rate?
Pick one, not both. Either enter a nominal return and let the inflation field deflate it, or enter an already-inflation-adjusted return and set inflation to 0. Entering a real return and a positive inflation rate subtracts inflation twice and understates your result.