See how your savings or investments grow with compound interest and regular monthly contributions, with a year-by-year breakdown of deposits and interest earned.
What is compound interest?
Compound interest means you earn interest on your interest. Each period's interest is added to your balance, so the next period's interest is calculated on a larger amount. Over long periods this snowball effect becomes the main driver of growth.
FV = P(1 + r)n + C × ((1 + r)n − 1) ÷ r
P is the starting amount, C the monthly contribution, r the monthly rate and n the number of months. Contributions are assumed at the end of each month.
Worked example
You start with $10,000, add $300 a month and earn 7% a year, compounded monthly, for 20 years.
- You contribute $82,000 in total.
- Your balance grows to about $196,665.
- Interest makes up about $114,665, more than everything you put in.
The three levers of growth
- Time: the most powerful lever. Starting ten years earlier can matter more than doubling your contribution.
- Rate of return: small differences compound into large gaps. Fees reduce your effective return, so keep them low.
- Contributions: regular, automatic deposits keep the snowball growing.
Realistic return assumptions
Savings accounts and CDs pay a known rate. Stock market investments have historically averaged higher long-term returns but with ups and downs, and past performance does not guarantee future results. Many planners use a conservative 5% to 7% for long-term diversified investing. Check how inflation affects the result with the inflation impact calculator.
Frequently asked questions
How often should interest compound?
More frequent compounding helps slightly, but the difference between monthly and daily is very small. See the APY calculator.
How long to double my money?
Use the Rule of 72: divide 72 by your annual return. At 7%, money doubles in about 10 years.
Related tools
Results are estimates for planning and education only. They are not financial, tax, legal or medical advice. Check important numbers with a qualified professional.