Compound interest calculator

How compounding plus contributions builds wealth

Compound interest is growth on your growth - and when you add a regular monthly contribution, each new dollar starts its own compounding clock. The combination is what turns modest, steady investing into a large balance over decades. This calculator compounds your starting amount and every monthly contribution together.

Worked example

Start with $10,000, add $500 a month, assume a 7% annual return, for 30 years:

• Total contributed: $10,000 + ($500 × 360) = $190,000
• Future value: about $691,150
• Interest earned: roughly $501,150 - more than double what you put in

The striking part is that the growth ($501,150) dwarfs the contributions ($190,000). That is compounding doing the heavy lifting over time.

Why starting early beats contributing more

Because early dollars compound the longest, time in the market usually beats the size of the contribution. Someone who invests $300 a month starting at 25 often ends up ahead of someone investing $600 a month starting at 40 - the extra years matter more than the extra money.

How to use the result

• Lower the return to a conservative figure to stress-test the plan; markets do not deliver a smooth 7% every year.
• Use a real return (around 4-5%) if you want the answer in today’s purchasing power.
• Raise the contribution to see how much each extra $100 a month changes the finish line.

Common mistakes

• Assuming a steady return; real markets are volatile, and a bad early stretch matters (sequence risk).
• Ignoring fees, which compound against you the same way returns compound for you.
• Forgetting taxes on gains in a taxable account.

To find the annualized rate behind a past result, use the CAGR calculator; to model investing the same amount on a schedule, see the dollar cost averaging calculator.