Comprehensive Guide
Learn more in our Personal Finance Guide.
How it works
compound interest calculator takes your inputs and produces future value, total contributed, interest earned, value in today's money, effective return. See how regular contributions and reinvested returns grow into a future value — with an inflation-adjusted view of what it is really worth. You provide 6 inputs: Initial balance (currency, in dollars) (default: 10000 dollars); Monthly contribution (currency, in dollars) (default: 400 dollars); Annual interest rate (percent, in percent) (default: 7 percent); Time span (years, in years) (default: 20 years); Inflation rate (percent, in percent) (default: 3 percent); Annual contribution increase (percent, in percent) (default: 0 percent). The calculator returns 5 outputs: Future value (the primary result); Total contributed (a secondary output); Interest earned (a secondary output); Value in today's money (a supplementary figure); Effective return (a supplementary figure). Personal finance decisions trade off today's comfort against tomorrow's security. The numbers behind that trade-off — how much to save, spend, borrow, or insure — are what this calculator makes concrete. Rather than rules of thumb, it gives you the actual arithmetic for your situation so you can compare options side by side and decide with confidence. The underlying formula: FV = P(1 + r/n)^(nt) with contributions added each period With the default values, future value is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
FV = P(1 + r/n)^(nt) with contributions added each period
Tips
- Compounding works hardest when untouched — avoid early withdrawals at any cost.
- A 1% higher return over 20 years can add close to 20% more to the final value.
- Set contributions to auto-increase every January before you notice the cash.
- Use the inflation toggle: judge future goals in today's dollars, not nominal ones.
Frequently asked questions
How often is interest compounded?
This calculator compounds monthly, which is the standard for savings accounts and retirement accounts. More frequent compounding (daily) adds a negligible edge over decades; the contribution size and time horizon matter far more.
What rate should I use?
High-yield savings currently pay 3.5-5%; diversified index-fund portfolios historically average 7-10% before inflation. Use the number that matches the account you actually plan to use, and treat stock projections as ranges, not promises.
What is the rule of 72?
Divide 72 by your annual rate to get the years until your money doubles: at 8%, about 9 years. It is a quick sanity check against the full compounding table this calculator produces.
Why does growth accelerate in later years?
Because the base gets larger every year. In year 1 growth applies to your starting balance; in year 20 it applies to a balance that already includes 19 years of growth. That is the entire mechanism of the hockey stick.