General
Compound Interest Calculator
Calculate the future value of an investment with monthly contributions — see exactly how much comes from what you put in versus what growth earns you.
Estimated future value
$150,425
after 20 years
Contributions
$65,000
Growth
$85,425
At a 7.0% annual return, $5,000 invested today plus $250.00/month grows to $150,425 after 20 years.
Of that, $65,000 comes from contributions and $85,425 comes from investment growth.
Your numbers
+Advanced options
Adds a today's-purchasing-power figure below. Optional.
Modeled as a reduction to your effective monthly return.
Steps your monthly contribution up each year.
See how the assumed return changes the result
Same contributions and time horizon, three different assumed annual returns — not predictions, just different assumptions.
4% return
$102,807
7% return
$150,425
10% return
$226,483
The formula
Future Value = Initial × (1 + r)ⁿ + Monthly Contribution × [(1 + r)ⁿ − 1] ÷ r
r is the monthly rate (annual return ÷ 12) and n is the number of months in the time horizon. The first term compounds your initial investment alone; the second term is the future value of an ordinary annuity — the running total of monthly contributions, each compounding for however many months remain after it's added.
The advanced assumptions modify this base formula rather than replacing it: an annual fee is subtracted from the monthly rate before compounding (a common simplification for an expense-ratio-style drag), annual contribution growth steps the monthly contribution up once per anniversary, and inflation is applied only at the end — deflating the final nominal result into a separate "today's purchasing power" figure.
How to read it
Compound interest is the closest thing investing has to a free lunch: the interest your money earns starts earning interest of its own. Over short periods the effect is subtle, but stretched across decades it accounts for the majority of long-term growth — often more than the contributions themselves.
The two levers that matter most are rate and time. A higher assumed return moves the result a lot, which is exactly why it's worth testing a conservative rate alongside an optimistic one rather than trusting a single number. Time matters just as much — the same monthly contribution started ten years earlier can roughly double the final balance.
This calculator assumes a constant annual return, which real markets never actually deliver — returns vary year to year, sometimes sharply. Treat the result as an illustration of how the math works, not a forecast of what any specific investment will do. The 4% / 7% / 10% comparison below the inputs exists for exactly this reason — it holds your contributions and time horizon fixed and only changes the assumed rate, so you can see how much of the final number is being driven by that one assumption.
Turning on the inflation assumption doesn't change the projection itself — it adds a second, separate figure showing what that future balance would be worth in today's purchasing power, at whatever inflation rate you assume. The gap between the two numbers tends to surprise people more than the growth number does.
Frequently asked
How is compound interest different from simple interest?+
Simple interest is earned only on your original balance, so it grows in a straight line. Compound interest is earned on your balance plus every bit of interest already added to it, so growth accelerates over time — the longer the time horizon, the bigger that gap becomes.
Does this assume interest compounds monthly?+
Yes. Interest is calculated and added to the balance every month (annual rate ÷ 12), and any monthly contribution is added at the end of that same month. This is the most common convention for savings and brokerage accounts.
What if I'm not making monthly contributions?+
Set monthly contribution to $0 and the calculator becomes a straightforward lump-sum compounding tool — just your initial investment compounding at the rate you enter.
Does this account for taxes, fees, or inflation?+
Taxes aren't modeled, but fees and inflation are available as optional advanced assumptions. Fees are applied as a reduction to your effective monthly return; inflation is used only to show a separate 'today's purchasing power' figure alongside — never in place of — the nominal result. Real returns still fluctuate year to year, so treat every rate here as an assumption you're testing, not a guarantee.
What does 'today's purchasing power' mean?+
It's the future balance divided by (1 + assumed inflation rate) raised to the number of years — an estimate of what that future amount would buy in today's terms, at the inflation rate you assumed. It is not a prediction of actual future inflation, which is unknowable in advance.
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View all →Educational tool, not advice. This calculator illustrates a standard formula using the numbers you enter. It does not account for your full financial picture, taxes, or local market conditions, and it is not a recommendation to buy, sell, or hold any asset. Speak with a licensed professional before making investment decisions.