See how your money grows over time with the power of compounding.
| Year | Balance | Principal | Contributions | Interest |
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Enter your starting principal, any monthly contributions you plan to make, your expected annual interest rate, and the number of years you'll invest. Choose how often the interest compounds (daily, monthly, quarterly, etc.), then click Calculate. You'll instantly see your final balance broken down into principal, contributions, and interest earned — along with a year-by-year table.
Compound interest is often called the "eighth wonder of the world" for a reason: it's the single most powerful force in personal finance. When your interest earns interest, even modest sums can grow into life-changing wealth over time.
Consider this: $10,000 invested at 7% annually for 30 years with no additional contributions grows to roughly $76,000. Add just $200 per month, and that number jumps to over $280,000 — meaning you contributed $72,000 but earned $200,000+ in interest alone. The math works for anyone: a 25-year-old starting a Roth IRA, a parent opening a 529 plan for a newborn, or someone saving for a house down payment over 5 years.
The two biggest variables are time and rate. Starting 10 years earlier can easily double your final balance. Even a 1% difference in return rate compounds into hundreds of thousands of dollars over a 30-year horizon. This calculator makes those effects visible so you can make smarter decisions today.
For a lump sum with regular contributions, the formula combines two components:
Where: P = initial principal, r = annual interest rate (decimal), n = compounding periods per year, t = time in years, PMT = periodic contribution amount.
For monthly contributions with non-monthly compounding, contributions are scaled to match the compounding period. The year-by-year table shows cumulative values at the end of each year.
Simple interest is calculated only on your original principal. Compound interest is calculated on your principal plus all previously earned interest. On a $10,000 investment at 7% for 10 years, simple interest gives you $17,000 while compound interest gives you ~$19,672 — a $2,672 difference that grows dramatically over longer periods.
More frequent compounding (daily vs. annually) produces slightly higher returns because interest is added to your balance more often, letting it earn interest sooner. However, the difference is small at typical rates — moving from annual to daily compounding at 7% adds roughly 0.22% effective annual yield. Focus on maximizing your rate and contribution amount before worrying about compounding frequency.
Absolutely. Just enter the APY (Annual Percentage Yield) your bank offers as the interest rate, set compounding to match your account terms (usually daily or monthly for savings accounts), and leave monthly contributions at $0 if it's a fixed deposit. The resulting balance will be very close to what your bank statement would show.
This is compounding's exponential nature. Interest earned in early years is small, but those amounts themselves start earning interest. The growth accelerates over time, which is why the last 10 years of a 30-year investment often account for more growth than the first 20 years combined. This is why starting early — even with small amounts — is so powerful.