Compound Interest Calculator
See what a lump sum grows to with compound interest.
Input sheet
DIY at your own risk. Calcora's calculators and guides are general estimates and information only — not professional, engineering, legal, or safety advice. Always verify local building codes and permit requirements, and hire a licensed pro for electrical, gas, plumbing, structural, or any work you're not fully comfortable doing yourself.
Compound interest is the engine behind long-term wealth: each period's earnings join the principal and earn their own return. Over decades, that snowball dwarfs the original deposit.
How it works
A = P(1 + r/n)^(nt). More frequent compounding earns slightly more.
The growth depends on three things — the rate, the time horizon, and how often interest compounds. More frequent compounding (daily versus yearly) helps a little, but time and rate dominate. Doubling the years matters far more than switching from monthly to daily compounding.
This models a single lump sum left to grow untouched. If you plan to add money regularly, use the savings calculator, which compounds a stream of monthly deposits instead.
Future balance = principal × (1 + rate ÷ periods)^(periods × years)
Worked examples
$10,000 at 7% for 20 years, compounded monthly → ≈ $40,387 future balance
10,000 × (1 + 0.07/12)^(12 × 20) ≈ $40,387 — the deposit roughly quadruples, and over $30,000 of that is interest.
$25,000 at 7% for 30 years, compounded monthly → ≈ $203,000 future balance
The extra decade of compounding turns a modest sum into roughly eight times its size — the clearest illustration of why starting early wins.
Tips & gotchas
- Time is the most powerful input — starting ten years earlier often beats contributing twice as much later.
- Reinvest dividends and interest; compounding only works if earnings stay in the account to compound.
- Compounding frequency matters less than people think — the jump from yearly to monthly is small, and monthly to daily is tiny. Focus on rate and time.
- Inflation quietly erodes the real value of the future balance; for spending-power planning, subtract your expected inflation rate from the return.
FAQ
How much does compounding frequency change the result?
Surprisingly little. At 7%, switching from annual to monthly compounding adds only a fraction of a percent to the final balance. The rate and the number of years do almost all the work.
What rate should I assume for the stock market?
Avoid overprecision — a long-run diversified portfolio has historically returned somewhere in the 6–8% range after costs, but any single decade can be far higher or lower. Model a range rather than betting on one number.
What if I add to the account each month?
This calculator assumes a single deposit. For recurring contributions, use the savings calculator, which compounds an ongoing monthly deposit.
Related calculators
Tip with Tax Calculator · Salary to Hourly Calculator · Simple Interest Calculator · Rule of 72 Calculator · Mortgage Calculator