Compound Interest Calculator
Compare compound-growth scenarios with contributions, a clear APY or nominal-rate choice, and separate totals for money saved and estimated growth.
This is an illustrative projection, not a forecast. Investment returns are not guaranteed and actual results can be lower or negative.
What to enter
Compound interest means accumulated interest can itself earn interest. The starting balance, subsequent deposits, rate, and time all influence the outcome. CFPB compound-interest explanation
| Input | How to use it |
|---|---|
| Starting amount | Money already allocated to this goal |
| Monthly contribution | Additional amount deposited at each month-end |
| Time horizon | Number of months over which to model growth |
| Rate mode | APY/effective annual return, or nominal annual rate |
| Annual rate | Your assumed percentage, not a promised future result |
| Compounding frequency | Used only with a nominal rate; ignored in effective mode |
Compare a contribution plan across rates
Suppose you start with $10,000 and contribute $200 at the end of every month for five years. Your own contributions total $22,000, including the initial deposit.
The 5% scenario ends about $1,816.63 above the 3% scenario. Neither rate is a forecast or a current product offer. Contributions account for most of the balance in these examples, which makes the amount you can consistently save an important part of the decision.
For investment scenarios, “growth” can be negative. A constant negative-rate illustration can show a loss, but it cannot reproduce the path of real market returns. The order and timing of returns and deposits matter; this tool does not estimate the probability of reaching a goal.
| Hypothetical effective annual rate | Total contributed | Estimated growth | Ending balance |
|---|---|---|---|
| 0% | $22,000 | $0 | $22,000 |
| 3% | $22,000 | $2,508.93 | $24,508.93 |
| 5% | $22,000 | $4,325.56 | $26,325.56 |
Why the rate mode matters
A hypothetical 7% nominal annual rate compounded monthly uses a monthly rate of 7% ÷ 12. A 7% effective annual rate uses (1.07)^(1/12) − 1 instead.
With $10,000 initially, $500 deposited at each month-end, and a ten-year horizon:
This is a difference in definitions, not evidence that one account or investment is better. When using a bank's advertised APY, select effective mode. APY is a standardized annual yield measure incorporating compounding. CFPB APY rules
| Assumption | Estimated ending balance |
|---|---|
| 7% nominal annual rate, monthly compounding | $106,639.02 |
| 7% effective annual return | $105,197.38 |
Calculation method
For each month, the model grows the opening balance by the equivalent monthly rate, then adds the contribution:
Next balance = current balance × (1 + monthly rate) + monthly contribution.
In nominal mode, with nominal annual rate r and m compounding periods per year, the equivalent monthly rate is (1 + r/m)^(m/12) − 1. In effective mode, it is (1 + annual effective rate)^(1/12) − 1. Rates in these formulas are decimals.
Using equivalent monthly growth for a nominal rate compounded quarterly, annually, or daily is a smoothing convention. It does not reproduce a particular bank's crediting calendar. The model excludes taxes, fees, withdrawals, inflation, rate changes within a scenario, and changing contribution amounts. Results use unrounded intermediate values and are displayed to cents.
The SEC's compound-interest calculator also lets users vary starting amounts, contributions, time, rates, and compounding. Different calculators may use different contribution-timing assumptions, so compare their methods before comparing results.
Make a decision from the range
Start with a contribution amount you can sustain. Then compare a lower rate, your central assumption, and a higher rate without treating any one result as certain. For savings, include 0% to see what the contribution plan accomplishes by itself.
If you have a fixed target and deadline, switch to the savings goal calculator. It works backward to a required contribution instead of asking you to guess one.