📈 Compound Interest Calculator
Start with a lump sum, add money every month and see how much you'll have in X years, and how much more compounding earns than simple interest.
Future value (after tax)
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How to use
- Pick a currency. Enter your initial investment (set 0 if you're starting from scratch) and your monthly contribution (set 0 for a one-time lump sum).
- Enter the expected annual interest rate or return and the number of years. Savings accounts and CDs might be 3 to 5%. Long-run stock index returns are often assumed at 6 to 8% a year.
- Choose how often interest compounds: annually, monthly or daily.
- Optionally enter a tax rate on the gains (0% for a Roth IRA or 401(k), 15.4% for Korean bank interest, or your bracket). The year-by-year table below highlights years when your balance is at least double what you put in.
Compound interest formula
- Lump sum:
A = P × (1 + r/n)n × t, where P is principal, r the annual rate, n compounding periods per year and t years. - With monthly contributions: each deposit grows the same way for the time it's invested, and the calculator adds them all up. Contributions are assumed at the start of each month (an annuity due), so each deposit earns that month's interest.
- Effective annual rate (APY):
(1 + r/n)n − 1. 5% compounded monthly is 5.116%, and compounded daily is 5.127%.
Example: $10,000 + $500 a month at 7%, compounded monthly
| Years | Contributed | Balance | Interest earned |
|---|---|---|---|
| 10 | $70,000 | $107,143.85 | $37,143.85 |
| 20 | $130,000 | $302,370.09 | $172,370.09 |
| 30 | $190,000 | $694,708.72 | $504,708.72 |
Doubling the time from 10 to 20 years nearly triples the balance, and by year 30 interest is more than 70% of the total.
The rule of 72
To estimate how long it takes money to double, divide 72 by the annual rate: about 12 years at 6%, 9 years at 8%, 24 years at 3%. It also works the other way: to double in 10 years, you need about 7.2% a year.
| Annual rate | Rule of 72 | Exact (annual compounding) |
|---|---|---|
| 3% | 24.0 years | 23.4 years |
| 5% | 14.4 years | 14.2 years |
| 7% | 10.3 years | 10.2 years |
| 10% | 7.2 years | 7.3 years |
How to get more from compounding
- Time matters most: starting 10 years earlier often beats doubling your contribution later. Change the years field and watch the table.
- Fees count: 1 percentage point of return (or fees) changes a 30-year result by 20 to 30%, which is why low-cost index funds matter.
- Use tax-advantaged accounts: a 401(k), IRA, UK ISA or Korean ISA can shelter growth from tax.
- Most bank deposits pay simple interest. For exact bank figures, use the CD & fixed deposit calculator or the savings calculator.
This assumes a constant return every year. Real investments such as stocks and funds fluctuate and can lose money. Tax is applied once to total gains at the end as a simplification, and inflation is not accounted for.
FAQ
How does compound interest work with monthly contributions?
Each monthly deposit starts earning interest, and that interest earns interest too. This calculator adds contributions at the start of each month and grows the balance by (1 + r/n)^(n/12) every month.
How much will $500 a month be worth in 30 years?
At a 7% annual return compounded monthly, $500 a month with no starting balance grows to about $613,500. You contribute $180,000, so over $430,000 is interest.
Monthly vs. daily compounding: does it matter?
Only a little. At 5%, monthly compounding gives a 5.116% effective rate and daily gives 5.127%. The rate and the number of years matter far more.
What is the rule of 72?
Divide 72 by the annual rate to estimate how many years it takes money to double. At 8% that’s about 9 years.
Should I include taxes?
If the money is in a taxable account, yes. Enter your tax rate on gains. Use 0% for tax-advantaged accounts like a Roth IRA, or 15.4% for Korean interest income.
Does this account for inflation?
No. To see results in today’s money, subtract expected inflation from the rate (for example 7% − 3% = 4%).