Compound Interest Calculator
Calculate how your investment grows with compound interest. Set compounding frequency, monthly contributions, and years. Includes a growth chart. Free calculator.
Reviewed for accuracy by Marcus Webb and the Blueprint Dynamics editorial team (last updated July 2026). Our calculators use primary-source formulas and are cross-checked against IRS publications, Fannie Mae guidelines, and Federal Reserve data. Learn more about our methodology.
Source: Federal Reserve, Freddie Mac, Bankrate national averages. Rates are approximate ranges for borrowers with good credit (700+). Actual rates depend on your credit score, loan-to-value ratio, and lender.
Future Value
$227,798
Contributions
$22,000
Interest Earned
$205,798
- Contributions
- Interest
How compound interest works
Compound interest means your interest earns interest. Unlike simple interest — which only applies to your original principal — compound interest grows your balance exponentially. A $10,000 investment at 7% compounded monthly grows to $20,097 after 10 years without a single additional contribution. Add $200/month and it grows to $54,000 over the same period. The mathematical difference between these two scenarios — zero vs. $200/month — is $34,000 added in contributions that turned into an additional $33,900 through compounding.
The formula explained
The future value formula is: FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]. Where P is principal, r is annual rate, n is compounding periods per year, t is years, and PMT is regular contribution. This calculator handles the formula for you — but understanding the variables helps you see which ones to optimize. Time (t) has the most powerful exponential effect, which is why starting early matters far more than earning a slightly higher return.
Compounding frequency — does it matter?
Yes, but less than most people expect. At 7% over 20 years on $10,000: annual compounding yields $38,697. Monthly compounding yields $40,170. Daily compounding yields $40,255. The difference between monthly and daily is only $85 on $10,000 over 20 years. For practical purposes, the compounding frequency of your savings account matters far less than your contribution rate and the return rate you earn.
Most bank savings accounts and CDs compound daily. Most stock market index fund growth is effectively continuous. Bonds typically compound semi-annually. Mortgages compound monthly (which is why the monthly rate in mortgage math is APR/12, not the more favorable (1+APR)^(1/12)−1).
The Rule of 72
Divide 72 by your annual return rate to estimate doubling time. At 6%, money doubles in ~12 years. At 8%, ~9 years. At 4%, ~18 years. At 2%, ~36 years. This mental shortcut is accurate within 1–2% for rates between 4–15%. It's useful for quick comparisons — a 6% return doubles your money in 12 years, but a 9% return doubles it in 8. That extra 3% return turns two doublings into three over 24 years: $100,000 becomes $400,000 at 6% vs. $800,000 at 9%.
Inflation's impact on real returns
A nominal return of 7% with 3% annual inflation produces a real return of approximately 4%. Your calculator result shows nominal future value — the actual purchasing power of that amount will be less. To estimate real future value, use your expected real return (nominal rate minus expected inflation) in the rate field. Historical US stock market returns have averaged roughly 10% nominal and 7% real (after ~3% inflation) over long periods.
Practical applications
Use this calculator to: (1) Determine how much to invest now to hit a retirement target. (2) Compare the long-run cost of waiting 5 years to start investing. (3) See whether contributing more or earning a higher return has a bigger impact for your timeline. (4) Project a college savings account given regular monthly contributions. For a $100,000 college fund in 18 years, you need roughly $275/month at 6% — or $355/month if you wait until the child is 5.