What is compound interest?
Compound interest is interest earned on both your original money and on the interest you've already accumulated. It's the reason a small, consistent investment today can grow into a large balance years from now — and why starting early matters more than starting big.
How this calculator works
Enter your starting balance, how much you'll add each month, your expected annual return, and how long you'll invest. The tool compounds your returns at the frequency you choose and adds your contribution at the end of each month.
A key insight: the longer your timeline, the larger the share of your final balance that comes from interest rather than your own contributions. Try raising the number of years and watch the "interest earned" figure outpace your "total contributions."
Example
Start with $5,000, contribute $300/month, earn 7% annually, and invest for 30 years: the balance grows to roughly $370,000, of which only about $113,000 was money you contributed. The rest is interest working for you.
Where your return goes
- 0–5% — typical for savings accounts and CDs (safe, low growth).
- 6–8% — a common long-term assumption for a diversified stock portfolio.
- 9%+ — aggressive assumptions that carry meaningful downside risk.
Related tools
- Retirement / FIRE calculator — see if this nest egg supports your goals.
- Savings goal calculator — work backwards from a target.
- Loan amortization calculator — compound interest working against you.