How to use the compound interest calculator
- Enter the amount you start with, how much you add every month, the yearly interest rate or expected return, and how many years you will save. Any currency works.
- Choose how often interest is compounded. Bank savings accounts often compound monthly or daily; bonds may pay twice a year.
- See the final balance, how much of it you paid in and how much is interest, plus a chart and a year-by-year table.
What is compound interest?
With compound interest you earn interest not only on the money you deposit but also on the interest you have already earned. The longer the money stays invested, the faster it grows. Without any monthly deposits the formula is A = P × (1 + r ÷ n)n × t, where P is the starting amount, r the yearly rate, n the number of compounding periods per year and t the number of years.
Example
10,000 invested at 5% per year, compounded monthly, grows to about 16,470 after 10 years and to about 44,677 after 30 years without adding anything. Adding 200 every month as well brings the 10-year total to about 47,526, of which 34,000 is your own money and the rest interest.
The rule of 72
To estimate how long it takes to double your money, divide 72 by the yearly interest rate. At 6% it takes about 72 ÷ 6 = 12 years; at 9% about 8 years.
Good to know
- Results assume a fixed rate. Stock market returns go up and down from year to year, so treat them as an estimate, not a promise.
- Inflation, taxes on interest and account fees reduce what you actually keep. Use a lower rate to see a more cautious estimate.
- Monthly contributions are added at the end of each month.