Compound Interest Calculatorwith Monthly Contributions
Calculate your investment growth with our interactive calculator.
Range: $0 - $50,000
💡 You can type any amount directly in the input field
Range: $0 - $2,000
💡 You can type any amount directly in the input field
Range: 1% - 15%
💡 You can type any rate directly in the input field
Range: 1 - 50 years
💡 You can type any number directly in the input field
Advanced Settings
FIRE Calculator
Financial Independence, Retire Early
Ready to achieve financial independence? Use our FIRE calculator to determine exactly how much you need to save and invest to retire early. Calculate your FIRE number, track your progress, and plan your path to financial freedom.
Compound interest is the process where your investment earns returns not only on your initial principal but also on the accumulated interest from previous periods. Albert Einstein allegedly called it "the eighth wonder of the world," and for good reason—it's the most powerful force in wealth building.
Unlike simple interest, which only calculates returns on your original investment, compound interest creates exponential growth. Each year, your earnings generate their own earnings, creating a snowball effect that accelerates over time. This is why starting early is so crucial—the longer your money compounds, the more dramatic the results.
For example, if you invest $10,000 at 8% annual return, you'll have $10,800 after one year. In year two, you earn 8% on $10,800 (not just the original $10,000), giving you $11,664. After 30 years, that initial $10,000 grows to over $100,000—without adding a single dollar more.
Initial Investment
Enter the amount of money you're starting with. This could be your current savings, an inheritance, or any lump sum you plan to invest. Even if you're starting from zero, you can still build substantial wealth through consistent monthly contributions.
Monthly Contribution
This is the amount you plan to invest each month. Consistent monthly contributions are often more important than your initial investment. Even small amounts like $100-$300 per month can grow into hundreds of thousands of dollars over time thanks to compound interest.
Annual Return Rate
The expected annual rate of return on your investment. Historical stock market returns average around 10% before inflation, or about 7-8% after inflation. Conservative investors might use 6%, while aggressive investors might project 10-12%. Remember, higher returns come with higher risk.
Investment Period
How many years you plan to let your money grow. The longer your investment period, the more powerful compound interest becomes. Even a few extra years can make a massive difference—this is why starting in your 20s vs 30s can mean hundreds of thousands of dollars in additional wealth.
Inflation Adjustment
Toggle this on to see your returns adjusted for inflation. This shows you the "real" purchasing power of your future wealth. While $1 million sounds impressive, inflation means it won't buy as much in 30 years as it does today. Planning with inflation-adjusted numbers gives you a more realistic picture.
The difference between starting at 25 vs 35 isn't just 10 years of contributions—it's the compound growth on those early contributions. Here's a shocking example:
The Tale of Two Investors
Sarah (starts at 25):
Invests $300/month for 10 years, then stops
Total invested: $36,000
Value at 65: $338,000
Mike (starts at 35):
Invests $300/month for 30 years
Total invested: $108,000
Value at 65: $367,000
Sarah invested $72,000 less but ended up with almost the same amount! That's the power of starting early.
The first 10 years of compound growth are worth more than the last 20 years of contributions. This is why financial advisors always say "time in the market beats timing the market." Start now, even with small amounts.
Total Contributions
This is the actual money you put in—your initial investment plus all monthly contributions over the years. This is "your money" that you earned and saved.
Interest Earned
This is the "free money" generated by compound interest. It's the difference between what you put in and what you end up with. In successful long-term investments, interest earned often exceeds your total contributions by 2-3x or more.
Final Balance
Your total wealth at the end of the investment period. This is contributions plus interest earned. If you enabled inflation adjustment, this shows the purchasing power in today's dollars, giving you a realistic sense of your future wealth.
What's a realistic rate of return?
The S&P 500 has historically returned about 10% annually before inflation, or 7-8% after inflation. However, past performance doesn't guarantee future results. Conservative investors might use 6%, moderate investors 8%, and aggressive investors 10-12%. Your actual returns will vary year to year.
Should I include inflation in my calculations?
Yes! Inflation erodes purchasing power over time. While $1 million sounds impressive, with 3% annual inflation, it will only have the purchasing power of about $412,000 in today's dollars after 30 years. Always plan with inflation-adjusted numbers to avoid disappointment.
How much should I invest each month?
Financial experts recommend saving 15-20% of your gross income for retirement. If you earn $60,000/year, that's $750-$1,000/month. Start with what you can afford and increase it over time. Even $100/month is better than nothing—it can grow to over $100,000 in 30 years.
What if I can't afford to invest right now?
Start small. Even $25 or $50 per month builds the habit and takes advantage of compound interest. As your income grows, increase your contributions. The most important thing is to start—you can always increase later. Many people regret waiting, but no one regrets starting early.
Does this calculator account for taxes?
No, this calculator shows pre-tax growth. Your actual after-tax returns depend on your account type (401k, Roth IRA, taxable brokerage) and tax bracket. Roth IRAs grow tax-free, traditional IRAs are taxed on withdrawal, and taxable accounts are taxed on dividends and capital gains.
Can I really become a millionaire with compound interest?
Absolutely! Investing $500/month at 8% return for 35 years results in over $1.1 million. It doesn't require a high salary or lucky stock picks—just consistency and time. The key is starting early and never stopping, even during market downturns.
- Start immediately: Every year you wait costs you tens of thousands in compound growth. Even if you can only invest $50/month, start today.
- Automate your investments: Set up automatic transfers so you invest before you have a chance to spend the money. "Pay yourself first" is the most reliable wealth-building strategy.
- Increase contributions over time: Whenever you get a raise, increase your investment amount. If you get a 3% raise, invest at least 1-2% of it before lifestyle inflation kicks in.
- Don't panic during downturns: Market crashes are buying opportunities. Keep investing through downturns—you're buying stocks "on sale." The worst thing you can do is stop investing when markets drop.
- Minimize fees: High investment fees eat into compound growth. A 1% fee might not sound like much, but it can cost you hundreds of thousands over decades. Use low-cost index funds.
- Reinvest dividends: Always reinvest dividends and capital gains. This accelerates compound growth by putting every dollar to work immediately.
- Max out tax-advantaged accounts first: 401k and IRA contributions grow tax-deferred or tax-free, supercharging your compound growth. Always get your full employer 401k match—it's free money.
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