Compound interest calculator

Calculate your own savings growth

Math: FV = P(1 + r/n)^nt + PMT[((1 + r/n)^nt - 1) / (r/n)], where P is your starting amount, PMT is your contribution spread across compounding periods, r is the annual rate, n is compounds per year, and t is years. This is a projection, not a guarantee; actual returns vary year to year and are never guaranteed.

What is compound interest?

Compound interest is what happens when the interest your money earns gets added to your balance and starts earning interest itself, instead of being paid out separately. Simple interest only ever pays you a percentage of your original deposit; compound interest pays you a percentage of your original deposit plus every dollar of interest it has already earned. Over short periods the difference is small. Over decades it is the entire reason retirement accounts work the way they do.

The U.S. Securities and Exchange Commission's investor education site, Investor.gov, hosts a public compound interest calculator built on exactly this idea: letting your money's own earnings join the principal so growth accelerates over time rather than staying flat.

What is the compound interest formula?

For a lump sum with no further deposits, the formula is A = P(1 + r/n)^nt, where P is the amount you start with, r is the annual interest rate as a decimal, n is how many times per year the interest compounds, and t is the number of years. Add regular contributions and the formula gets a second term for the growth of each future deposit: FV = P(1 + r/n)^nt + PMT[((1 + r/n)^nt - 1) / (r/n)], where PMT is the amount you contribute each compounding period. That second term is what the calculator above is doing every time you change your monthly contribution.

In plain words: the first term grows whatever you already have, and the second term grows every future deposit for the time it has left to sit in the account. A dollar contributed in year one compounds for the full stretch; a dollar contributed in the last year barely compounds at all. That is the entire mechanical reason time matters more than almost anything else in this formula.

What is the Rule of 72?

The Rule of 72 is a shortcut for estimating how many years it takes an investment to double at a given annual return, without doing the exponent math: divide 72 by the interest rate (as a whole number, not a decimal). At 7%, that is 72 / 7, or about 10.3 years to double. The actual answer, solved from the compound interest formula with monthly compounding, is about 9.9 years, so the shortcut is close but slightly conservative at this rate; it is most accurate in the 6% to 10% range and drifts further off at very low or very high rates. Investor.gov's investor-education materials cover the Rule of 72 alongside its compound interest calculator as one of the standard mental-math tools for estimating growth.

How much does starting early actually matter?

Time is the biggest lever in this formula, bigger than the rate of return and bigger than the size of your contribution, because it is the only input that compounds on itself twice: more years means more deposits AND more time for every deposit to grow. Here is the same $100 a month, at the same 7% return, started 10 years apart, both running until age 65:

Math derived from the compound interest formula above, monthly compounding.

The 25-year-old contributed only $12,000 more in total than the 35-year-old (ten extra years of $100 a month), but ended up with $140,484 more at 65, over 11 times the size of the extra contribution. The gap is not from saving more; it is from giving the early dollars an extra decade to compound. Waiting to start is the single most expensive decision in this entire calculation, more expensive than picking a fund with a slightly lower return.

How does $200 a month grow at 7%?

This is the same math as the calculator above, run with no starting principal, so the growth is purely from monthly $200 deposits at a 7% annual return compounded monthly:

Math derived from the compound interest formula above (FV = P(1 + r/n)^nt + PMT[((1 + r/n)^nt - 1) / (r/n)]), monthly compounding, no starting principal.

Notice how the interest column overtakes the contributed column: by year 20 interest already exceeds total contributions, and by year 40 interest is more than four times what was actually deposited. That crossover, where the money you earned outweighs the money you put in, is the practical definition of compounding taking over.

Do tax-advantaged accounts change the math?

The compounding math itself is identical in a taxable brokerage account and inside a 401(k) or IRA; the formula above does not know or care what kind of account holds the money. What changes is how much of the growth you actually keep. In a regular taxable account, dividends, interest, and realized gains are typically taxed as they occur, which quietly shrinks the amount left to compound each year. In a traditional 401(k) or traditional IRA, growth is tax-deferred: nothing is taxed until you withdraw it, so the full balance keeps compounding untouched for decades. In a Roth 401(k) or Roth IRA, qualified withdrawals in retirement are not taxed at all, so every dollar of the growth shown above is money you keep.

Because none of the examples above pay any drag from yearly taxes, they most closely resemble what actually happens inside a 401(k) or IRA, not a taxable brokerage account holding the same investments. See which retirement account should come first for the order to fund them in, and the current 2026 contribution limits for how much room you have in each one this year.

What interest rate should you assume?

The calculator defaults to 7%, a commonly used illustrative long-term stock-market assumption after inflation, but it is only an assumption, not a promise; this site does not give investment advice and cannot tell you what your portfolio will actually return. Actual annual returns swing widely and can be negative in any given year. A lower assumption (4% to 5%) is more conservative and more appropriate for a bond-heavy or near-retirement portfolio; a higher one assumes a stock-heavy portfolio and a long time horizon that can ride out down years. Try the calculator at a few different rates to see how sensitive your own projection is to that single assumption.

The bottom line

Compound interest rewards two things above all else: time in the market and consistency of contribution. The rate of return matters, but starting ten years earlier at the same rate beat a decade of extra contributions in the worked example above. If you have not started, the biggest cost of waiting is not the money you are not saving right now; it is the decades of compounding on that money you are giving up permanently. Once you know roughly how much you need overall, see how much you need to retire to check your target against this projection.

Related retirement guides

Figure out where new savings should go first with which retirement account should come first, check this year's contribution room with 2026 contribution limits, and see how much you need to retire for a target to project this calculator against.