How to use the Compound Interest Calculator
- Enter your starting amount and how much you will add each month.
- Enter the expected annual return and the number of years.
- Choose the compounding frequency to see your final balance and growth table.
- Optional: enter a savings goal to solve the monthly contribution needed.
The compound interest formula
Compound interest means you earn interest on your interest. For a single deposit the formula is A = P(1 + r/n)nt, where P is the principal, r the annual rate, n compounding periods per year and t the number of years. Regular contributions are added each month and compound from the month they are deposited.
The rule of 72
Divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 7% a year, money doubles roughly every 10 years; at 4% it takes about 18 years.
What rate should I use?
High-yield savings accounts typically pay a few percent a year. Long-run stock market returns have historically averaged around 7% a year after inflation, but returns vary widely from year to year and are not guaranteed.
Frequently asked questions
How often is interest compounded?
Savings accounts usually compound daily or monthly; bonds often semi-annually. More frequent compounding gives slightly higher returns.
Does this account for inflation or taxes?
No. Use an inflation-adjusted (real) rate if you want results in today’s money.