Estimate your savings or spending through our compound interest calculator. Enter your initial amount, contributions, rate of return and years of growth to see how your balance increases over time.
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CJInterest doesn't just grow — it builds on itself over time. That's compound interest: your returns generate their own returns, turning small amounts into much more.
The MoneyGeek Compound Interest Calculator shows exactly how your savings or debt might grow. Enter a few details to see how different timeframes, contribution patterns and interest rates affect your balance.
Our calculator helps you estimate future interest on investments or debt without complex formulas. Just enter your numbers to get a clearer view of your financial future.
Start with your principal amount — the initial investment or debt. For example, if you're investing $500, enter that number.
Your starting amount is the foundation for compound growth. Larger amounts benefit more from the "snowball effect," where returns generate additional earnings, significantly impacting your long-term balance.
Enter how much you'll add to your investment or pay toward your debt, and select monthly or annual frequency.
Enter that amount for $20 yearly investments and choose "Annually." For $20 monthly debt payments, select "Monthly."
Monthly contributions give you an advantage because your money starts compounding sooner and more often, accelerating growth compared to annual contributions. Try different amounts or frequencies to see the impact on your ending balance.
Enter the average monthly compound interest rate you expect to earn or pay. For example, enter 8% for your expected investment return.
The rate dramatically impacts your results. Even a 1% to 2% difference can significantly change your final balance over time. Since investment returns vary, test different scenarios to understand potential outcomes.
Enter how long you'll keep your money invested or how long you'll take to pay off debt. For a five-year investment, enter "5."
Time is crucial in compound interest. Longer timeframes often more than double your returns due to exponential growth, not just simple addition. Try extending the period to see how much larger your balance could become.
The bar chart shows how your balance grows year after year.
Notice how compound interest accelerates over time, starting slowly but gaining momentum in later years as your interest earns additional interest.
The pie chart divides your total balance by source: initial principal (purple), total contributions (blue) and interest earned through compounding (green).
This visual breakdown shows what portion of your final balance came from your deposits versus what was generated by investment growth over time.
The compound interest table provides a year-by-year breakdown of your starting balance, annual contributions, cumulative contributions, interest earned, cumulative interest and total balance.
This detailed view shows how consistent savings or debt payments build up, and how compound interest contributes more each year.
Adjust variables to experiment with different scenarios. Try changing your contributions, rates of return or timeframes. Compare investing more upfront versus making larger contributions later, or higher-risk investments versus conservative options.
Experimenting helps you find the most effective approach for your financial goals.
Compound interest means earning interest on both your original amount and the accumulated interest. This "interest on interest" allows your money to grow faster the longer it stays invested.
Think of a snowball rolling downhill. As it rolls, it collects more snow, growing larger. The bigger snowball then gathers even more snow with each turn. Similarly, compound interest builds momentum — small early returns become larger gains later as your interest earns its own interest.
Compound interest works both ways:
With simple interest, you earn interest only on your original principal. If you earn 10% annually on $100, you'll make $10 every year. After 20 years, you'd have $300: your $100 principal plus $200 in interest.
With compound interest, interest adds to your balance, and new interest calculations include previous earnings. In the second year, you'd earn interest on $110 instead of just $100. Over 20 years, that same $100 grows to $673, showing how powerful compounding becomes over time.
This calculation difference grows more significant as time passes. Compound interest can be your strongest ally or greatest challenge when it comes to saving or managing debt.
Imagine investing $500 at an 8% annual return with monthly compounding to see compounding in action. Here's what your interest earnings could look like over five years without adding new money:
Your interest earnings grow each year because your larger balance generates more interest. That's compounding at work. The longer your money stays invested, the more dramatic the growth.
Starting early and staying consistent are major advantages. Given enough time, even small amounts can snowball into meaningful savings.
The compound interest formula helps determine how much interest you'll accrue on an investment or debt. You need your principal balance, interest rate, compounding frequency and time period.
The compound interest formula is:
Where:
To calculate only the compound interest earned (CI), subtract the initial principal (P) from the ending balance:
Where:
To calculate the ending balance with ongoing contributions (c), a second term is added:
![A = P(1+r/n)^(nt)+c[((1+r/n)^(nt)-1)/(r/n)]](https://res.cloudinary.com/moneygeek/image/upload/v1603179399/MoneyGeek.com/media/CI_equation3_e34uyc.svg)
Where:
Our calculator uses these formulas behind the scenes. If you select monthly contributions, the calculator uses monthly compounding, even if the monthly contribution is zero. With annual contributions, annual compounding is applied.
Understanding how taxes affect your compound interest is important for planning returns. Tax treatment varies by account type and impacts how much of your earnings you keep.
Taxable Accounts
Tax-Deferred Accounts (e.g., Traditional 401(k)s, IRAs)
Tax-Exempt Accounts (e.g., Roth IRAs, Roth 401(k)s)
Tax-advantaged accounts allow your entire balance, including interest, to grow without interruption from taxes. Over time, this can lead to much higher returns than taxable accounts. The benefit is especially noticeable with longer investment horizons, where uninterrupted compounding can result in 25% to 40% more wealth.
Compound interest affects both saving and borrowing. These common questions break down key concepts to help you make informed financial decisions.
The Rule of 72 quickly estimates how long it will take for your investment to double at a fixed return rate. Divide 72 by your annual interest rate (without the percent sign).
For example, with 10% annual interest: 72 ÷ 10 = 7.2 years to double
This shortcut provides a helpful estimate without using the full compound interest formula.
The time value of money means money received today is worth more than the same amount received later because it can grow through investment. If someone owes you $100, you'd prefer it now to next month since it could start earning interest immediately.
Economists explain this using a "risk-free rate," which is the safest rate your money could earn over a given period.
The compound annual growth rate (CAGR) represents the average yearly return of an investment over time, assuming compounded gains. This metric evaluates investments with fluctuating returns by providing a smooth, consistent measure of overall growth. It uses the compound interest formula rearranged to calculate the return rate using your beginning balance, ending balance and number of years.
Compound interest works against you with debt. When you don't pay off your balance regularly, interest gets added to your principal and future interest calculations include this higher amount. The longer you delay repayment, the faster your total debt grows, often surprising borrowers.
Compounding frequency determines how often interest is added to your balance. Daily compounding calculates interest every day, monthly compounding adds interest monthly, and annual compounding does so yearly.
More frequent compounding means faster growth, or faster debt increase. For accurate estimates, match your calculator settings to your account or loan terms..
Check your loan or account terms for phrases like "compounded daily," "compounded monthly" or "APY" (annual percentage yield), which include compounding. Most credit cards use daily compounding, while investment accounts and loans vary.
About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
