Compound Interest Calculator
Project long-term investment growth. Combines a starting principal with recurring contributions and compounding interest, with a year-by-year breakdown.
📖 Read the guide: Compound interest, explained
Show year-by-year breakdown
| Year | Start of year | Contributions | Interest | End of year |
|---|
The compound interest formula
A = P × (1 + r/n)nt + PMT × ( ((1 + r/n)nt − 1) / (r/n) ) × (1 + r/n)type
Where P is principal, r is annual rate, n is compounding periods per year, t is years, PMT is the periodic contribution, and type is 0 for end-of-period or 1 for start-of-period contributions.
Why time matters more than rate
Doubling your monthly contribution roughly doubles your final balance. Doubling your time horizon can quadruple it. A 25-year-old who saves $500/month at 7% has $1.2M by 65; the same person starting at 35 has $590K. The 10 extra years of compounding nearly doubles the result without changing anything else.
Realistic return assumptions (US, long-term)
| Asset | Long-term nominal return | Risk |
|---|---|---|
| High-yield savings | 4–5% | Very low |
| Treasury bonds (10-yr) | 3–4.5% | Low |
| Corporate bonds (investment grade) | 4–5.5% | Low–medium |
| S&P 500 (since 1928, with dividends) | ~10% nominal, ~7% real | Medium–high |
| Total stock market index | ~9–10% nominal | Medium–high |
Inflation
The numbers above are nominal — they don't account for inflation. To see what your final balance would buy in today's dollars, subtract roughly 2.5–3% from your assumed return rate (the long-term US inflation average). $1M in 40 years at 3% inflation has the buying power of about $310K today.
This calculator is for educational purposes and is not financial advice. Past returns do not guarantee future results.