Compound Interest Calculator
See how your savings and investments grow over time. Model contributions, withdrawals, or both to plan for saving, retirement drawdowns, or any scenario in between.
Your numbers
How much you have right now
S&P 500 averages ~10% historically
Amount you'll add each month
Amount you'll take out each month (e.g. retirement income)
Results
Growth Over Time
Year-by-Year Breakdown
| Year | Start Balance | Contributions | Interest | End Balance |
|---|---|---|---|---|
| 1 | $10,000 | $6,000 | $919 | $16,919 |
| 2 | $16,919 | $6,000 | $1,419 | $24,339 |
| 3 | $24,339 | $6,000 | $1,956 | $32,294 |
| 4 | $32,294 | $6,000 | $2,531 | $40,825 |
| 5 | $40,825 | $6,000 | $3,148 | $49,973 |
| 6 | $49,973 | $6,000 | $3,809 | $59,782 |
| 7 | $59,782 | $6,000 | $4,518 | $70,299 |
| 8 | $70,299 | $6,000 | $5,278 | $81,578 |
| 9 | $81,578 | $6,000 | $6,094 | $93,671 |
| 10 | $93,671 | $6,000 | $6,968 | $106,639 |
How This Calculator Works
This calculator models how your money grows over time using the compound interest formula. Unlike simple interest — which only earns returns on your original deposit — compound interest earns returns on both your principal and your previously earned interest. That snowball effect is what makes compounding so powerful over long time horizons.
You can adjust the starting amount, monthly contributions, expected annual return, time period, and compounding frequency. The calculator also supports monthly withdrawals for modeling retirement drawdowns or any scenario where you're taking money out while your balance continues to earn interest. If withdrawals exceed growth, the calculator detects exactly when your balance hits zero.
The compound interest formula
The core formula is A = P(1 + r/n)^(nt) where P is your principal, r is the annual interest rate, n is the number of times interest compounds per year, and t is the number of years. When you add regular contributions, the formula extends to include the future value of an annuity. This calculator handles all of that automatically.
Compounding frequency matters
You can choose from five compounding frequencies: annually, semi-annually, quarterly, monthly, or daily. More frequent compounding means interest is calculated and added to your balance more often, which produces slightly higher returns. For example, $10,000 at 7% compounded annually grows to $19,672 after 10 years, while the same amount compounded daily reaches $20,138. The difference widens over longer periods.
Example scenarios
Steady saver
$10K start · $500/mo · 7% · 20 years
~$284,892
$130K contributed · $155K earned in interest
Early starter
$5K start · $300/mo · 8% · 30 years
~$492,174
$113K contributed · $379K earned in interest
Retirement drawdown
$500K start · $3K/mo withdrawal · 5% · 25 years
~$138,657
Balance lasts the full 25 years at this rate
Frequently Asked Questions
How much will $500 a month be worth in 20 years?
At a 7% average annual return compounded monthly, $500 per month for 20 years grows to approximately $260,464. You would have contributed $120,000 of your own money, with the remaining $140,464 coming entirely from compound interest. At 10%, the same contributions grow to roughly $379,684. The longer you invest, the more interest dominates — time is the most powerful variable.
What's the difference between compound and simple interest?
Simple interest is calculated only on your original principal. If you invest $10,000 at 5% simple interest, you earn $500 per year every year. Compound interest earns returns on both your principal and your accumulated interest. That same $10,000 at 5% compounded annually earns $500 the first year, $525 the second year, $551 the third year, and so on. Over 20 years, simple interest yields $20,000 while compound interest yields $26,533 — a 33% difference from the same rate.
What is a good rate of return to expect?
The S&P 500 has returned roughly 10% annually on average since 1926. After adjusting for inflation, that drops to about 7%. High-yield savings accounts currently offer 4–5%, while bonds historically return 4–6%. A blended portfolio might target 6–8% depending on your mix of stocks, bonds, and other assets. This calculator defaults to 7% as a reasonable long-term estimate for a diversified investment portfolio.
How does compounding frequency affect my returns?
More frequent compounding means interest is calculated and added to your balance more often, producing slightly higher total returns. The difference between annual and daily compounding on a $10,000 balance at 7% over 10 years is about $466. Over 30 years, that gap widens to roughly $3,400. Most savings accounts and bonds compound daily or monthly. For stock investments, the distinction is largely theoretical since returns fluctuate daily.
Can compound interest work against me?
Yes — compound interest works the same way on debt. Credit card balances at 20–25% APR compound against you, meaning unpaid interest gets added to your balance and you start paying interest on that interest. A $5,000 credit card balance at 22% APR with minimum payments can take over 20 years to pay off and cost more than $8,000 in interest. Use the Debt Payoff Calculator to see how quickly you can eliminate high-interest debt.
How do withdrawals affect compound interest growth?
Withdrawals reduce your balance, which means less money earning interest in future periods. This calculator lets you model both contributions and withdrawals simultaneously — useful for planning retirement drawdowns. If your withdrawal rate exceeds your growth rate, your balance will eventually deplete. The calculator detects this and shows you exactly which year your money runs out, helping you plan sustainable withdrawal rates.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for your money to double. Divide 72 by your annual return rate: at 6%, your money doubles in about 12 years; at 8%, about 9 years; at 10%, about 7.2 years. It's an approximation, but remarkably accurate for rates between 4% and 12%. This calculator shows the exact results year by year, so you can see the precise doubling point in the table.
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