Investing
Compound interest calculator
Compound interest means your money earns returns, and those returns then earn returns of their own. This calculator shows how much your money could grow with regular contributions over the years.
Initial capital
$
Monthly contribution
$
Annual return
%
Number of years
Annual inflation (optional)
%
Leave it at 0 if you don't want to factor it in.
Annual fee (optional)
%
Annual management fee on the balance (e.g. a fund's expense ratio).
Quick return scenarios
These are adjustable simulations, not return forecasts.
Resets these values back to their defaults.
Estimated final balance after 20 years
$122,759
$58,000
Total contributed
$64,759
Interest earned
Of the final $122,759, you contributed $58,000 and $64,759 comes from accumulated returns.
Contributed vs. returns
$122.8K
Total
Contributed
$58,000 · 47%
Returns
$64,759 · 53%
Year-by-year growth
Contributed
Total with returns
Scenario comparison
Final balance with the same contributions at a 4%, 6%, or 8% return.
Year-by-year detail
Key years shown. Expand to see the full detail.
| Year | Contributed | Interest | Total |
|---|---|---|---|
| 1 | $12,400 | $665 | $13,065 |
| 5 | $22,000 | $5,279 | $27,279 |
| 10 | $34,000 | $16,403 | $50,403 |
| 15 | $46,000 | $35,348 | $81,348 |
| 20 | $58,000 | $64,759 | $122,759 |
How to read the result
Your final balance is made up of two parts: what you contribute, and the interest that money earns over time. The longer the timeline, the bigger interest tends to be relative to your contributions. That's the magic of compound interest.
The conservative, moderate, and optimistic scenarios are just adjustable starting points. Tune them to your situation, and remember that no return is ever guaranteed.
How it's calculated
The simulation moves month by month: it starts from your initial capital, adds your monthly contribution, and applies the proportional share of the annual return. The annual return is treated as an effective rate, so a 6% annual return equals exactly 6% after one year. If you add inflation, the result is also shown in today's money; if you add a fee, it's deducted from the balance every month.
A simple example
Say you start with $10,000 and add $200 every month for 20 years. With the simulator you'll see that, at a reasonable rate of return, a large share of the final balance doesn't come from your contributions. It comes from accumulated interest. Try stretching the timeline to 30 years to see that effect take off.
Frequently asked questions
What is compound interest?
It's the effect of your money earning a return, and that return, once reinvested, going on to earn a return of its own. Over time growth speeds up, because each year you're starting from a bigger base.
What annual return should I use?
There's no single correct figure, and no one can predict future returns. That's why the calculator offers scenarios (conservative, moderate, and optimistic) that you can adjust freely. They're simulations to visualize possibilities, not forecasts.
Does it account for inflation?
Yes, optionally. If you enter an annual inflation rate, the calculator also shows the final balance "in today's money": its current purchasing power, which is always lower than the nominal figure.
Can I factor in fees?
Yes. You can add an annual fee (like the expense ratio of a fund). The calculator deducts it from the balance every year and shows you how much those fees add up to over time.
Where is compound interest commonly put to work when investing?
A common approach is investing regularly over the long term in diversified, low-cost products such as index funds or ETFs, reinvesting the returns so compound interest can do its job. This is general information, not a recommendation: the right product depends on your situation and time horizon, so it's worth doing your research before investing.
Are the results guaranteed?
No. This is an educational tool that projects a scenario based on the numbers you enter. The real return on any investment varies and can be negative. This is not financial advice.
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