How to use this calculator
- Starting amount. Enter the money you have at the start. Use 0 if you are starting from nothing.
- Monthly contribution. Enter what you plan to add each month. The calculator adds it at the end of each month.
- Yearly interest rate. Enter the rate as a percent per year. This is the stated (nominal) rate, before compounding.
- Years. Enter how long the money stays invested.
- Compounding frequency. Choose how often interest is added to the balance: yearly, quarterly, monthly or daily.
The results show the future balance, your total contributions, the interest earned and the effective yearly rate (APY). The stacked chart splits each year into money you put in and interest. The year-by-year table lists the same figures in numbers.
Worked example
These are the starting values in the calculator above and the results they give. Change any input to see your own numbers.
- Starting amount
- $10,000
- Monthly contribution
- $300
- Yearly interest rate
- 7%
- Years
- 20 years
- Compounding
- Monthly
- Future balance
- $196,665
- Total contributions
- $82,000
- Interest earned
- $114,665
- Effective yearly rate (APY)
- 7.229%
How compound interest is calculated
Compound interest means you earn interest on your interest. Each time interest is added, the balance gets bigger, so the next interest payment is bigger too.
The calculator first turns the yearly rate into a rate for one month, based on the compounding frequency you chose. It then grows the starting amount for every month in the term and adds each monthly contribution at the end of its month. A contribution made early has more months to grow than one made late.
The effective yearly rate (APY) is the rate you really earn in one year once compounding is included. It is equal to the stated rate with yearly compounding and a little higher with more frequent compounding. The APY calculator compares frequencies side by side.
FV = P × (1 + i)^N + C × ((1 + i)^N − 1) ÷ i, where i = (1 + r ÷ n)^(n ÷ 12) − 1- FV
- future balance
- P
- starting amount
- C
- monthly contribution, added at the end of each month
- r
- yearly interest rate as a decimal
- n
- compounding periods per year
- i
- equivalent monthly rate
- N
- total number of months (years × 12)
What moves the result most
- Time. Growth speeds up the longer money is left alone. The last few years of a long term often add more than the first many years combined.
- Rate. A small change in the yearly rate makes a large difference over a long term, and a small difference over a short one.
- Contributions. In the early years most of the balance is money you paid in. Later, interest usually takes over.
- Compounding frequency. This matters least. Moving from yearly to monthly helps a little. Moving from monthly to daily changes very little.
The rate is fixed for the whole term in this model. Real returns go up and down, and fees, taxes and inflation are not included. Treat the result as an estimate. For a plain walk-through, read how compound interest works.
Frequently asked questions
What is compound interest?
Compound interest is interest paid on both your original money and the interest it has already earned. Each period, the interest is added to the balance, and the next period's interest is worked out on the larger amount. Over short periods the effect is small. Over many years it can make up most of the final balance.
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount, so you earn the same dollar amount every year. Compound interest is paid on the original amount plus past interest, so the dollar amount grows each year. With the same rate and term, compound interest always ends with a balance that is equal or higher.
Does daily compounding earn much more than monthly?
Usually not. Compounding more often does raise the effective yearly rate, but each step adds less than the one before. The jump from yearly to monthly is noticeable. The jump from monthly to daily is tiny at ordinary interest rates. The rate itself and the length of time matter far more than the frequency.
What is APY and why is it higher than the interest rate?
APY stands for annual percentage yield. It is the rate you actually earn over one year after compounding is included. When interest is added more than once a year, later interest is earned on earlier interest, so the yearly total ends up a little above the stated rate. With yearly compounding the two are the same.
Does this calculator include taxes, fees or inflation?
No. It assumes a fixed rate with nothing taken out. Taxes and fees would lower the balance, and inflation would lower what the balance can buy. To allow for them roughly, you can enter a lower yearly rate. The result is an estimate for comparing scenarios, not a forecast of what you will receive.
This calculator gives estimates for education only. It does not know your full situation and is not financial advice. Reviewed and updated November 15, 2026.