Compound interest calculator
See how your money grows with compound interest, with or without monthly contributions.
Compounding
End balance
144.573
Your result
Paid in
58.000
Initial plus monthly
Interest earned
86.573
End less paid in
Effective rate
7,23 %
Real yearly return
Balance year by year
- Balance
- Paid in
End balance at other interest rates
- 2 % a year73.873
- 4 % a year95.581
- 6 % a year125.510
- 8 % a year167.072
- 10 % a year225.155
- 12 % a year306.777
Dark line: your end balance
Contributions are added at the end of each month. Taxes, fees and inflation are not included.
What is compound interest?
Compound interest is interest earned on your money and on the interest it has already earned. Each period the balance grows a little, and the next period's interest is worked out on that larger balance. Over long periods this is what makes savings grow faster and faster.
Compound interest formula
A = P × (1 + r / n)^(n × t)
With monthly contributions: A + C × ((1 + i)^m − 1) / i
P is the initial amount, r the annual rate, n the compounding periods per year and t the years. C is the monthly contribution, i the monthly rate and m the number of months. The result is the future value of your money.
How to calculate compound interest: an example
You start with 10.000 and add 200 a month for 20 years at 7 %, compounded monthly. You end up with 144.573: 58.000 that you paid in and 86.573 of interest. Without the monthly contributions, the 10.000 alone would grow to 40.387.
How to calculate compound interest in Excel
The FV function takes the rate and periods, then the money you pay in:
=FV(7%/12,240,-200,-10000)
The rate is divided by 12 and the 20 years become 240 months. Money you pay in goes in as a negative number.
How often does interest compound?
The more often interest is added, the more you earn, though the gain gets smaller. One year at 10 % on 1.000 gives 1.100 compounded annually, 1.103,81 quarterly, 1.104,71 monthly and 1.105,16 daily. The effective annual rate on this page shows the real yearly return.
The rule of 72
To estimate how long your money takes to double, divide 72 by the annual rate. At 7 % that gives about 10 years, close to the exact 10,2 years. It works best with rates between 4 % and 12 %.