Compound Interest Calculator with Monthly Contributions
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See how savings and investments compound over time — with monthly contributions, a growth chart and a year-by-year breakdown.
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Why compounding is called the eighth wonder
With simple interest, only your original deposit earns returns. With compound interest, every period's gains join the principal and start earning themselves. The effect is small at first — then explosive. Someone investing $500/month at 7% has about $260,000 after 20 years but over $600,000 after 30. The last 10 years do more work than the first 20 combined.
That is why starting early beats investing more later. A 25-year-old investing $300/month until 65 ends up with roughly double what a 35-year-old investing $600/month achieves — same monthly effort, wildly different outcomes, purely because of extra compounding time.
How the maths works
Each compounding period multiplies your balance by (1 + r/n). Regular monthly contributions are added at the start of each month in this calculator, then compound for the remaining time — matching how most savings plans work.
A = P(1 + r/n)nt + PMT × [((1 + r/n)nt − 1) / (r/n)]
Three levers that matter most
- Time — the most powerful lever. Every extra year multiplies all previous growth.
- Rate of return — 2% more per year roughly doubles the outcome over 30 years.
- Contributions — steady deposits beat perfect timing; automate them.
How to calculate compound interest with monthly contributions
To calculate compound interest with monthly contributions you combine two pieces of maths:
- Grow your starting balance — a lump sum compounds as P(1 + r/n)nt: principal P, annual rate r, n compounding periods per year, t years.
- Grow every monthly deposit — each deposit compounds for its remaining time, which collapses into one annuity formula: PMT × [((1 + r/n)nt − 1) / (r/n)], where PMT is your monthly payment.
- Add the two together — the sum is your future value. Because deposits compound from the month they are added, starting a year earlier matters more than a slightly higher rate.
The calculator above runs all three steps instantly and shows the year-by-year breakdown, so you can see exactly which month your growth starts to outrun your deposits.
What does $200 a month grow to in 20 years?
A concrete example, at a 7% average annual return compounded monthly:
- You pay in: $200 × 240 months = $48,000
- It grows to: about $104,185
- Compounding earned: roughly $56,185 — more than you contributed
At 5% instead of 7% the same $200 a month reaches only about $82,210 — one percentage point of return is worth over $20,000 here. Enter your own numbers above to see your version of this table.
What will $10,000 be worth in 20 years?
Quick answer (lump sum, compounded monthly, before inflation):
- At 6%: about $33,102
- At 8%: about $49,268
- At 10%: about $73,281
Now add monthly contributions and the numbers change shape, not just size. At 7% for 20 years:
- $10,000 alone: grows to about $40,387
- $200/month alone: grows to about $104,185
- Combined: about $144,572 — from only $58,000 paid in, so roughly $86,572 (60%) is pure compounding
That split — what you put in vs what compounding added — is the "money multiple": here 2.5×, meaning growth more than doubled your deposits. Enter your own numbers in the calculator above to see your multiple.
Realistic return rates by investment type
The rate you type in is the single biggest assumption in the calculator. Use this as a guide — then try the low and high ends to see your range:
- Savings account: 3–5% — very low risk
- Government bonds: 4–6% — low risk
- Index funds (S&P 500): 7–10% — medium risk
- Real estate: 8–12% — medium risk
- Individual stocks: 5–20%+ — high risk
- Crypto: 15–40%+ — very high risk
A shortcut for the rate's power: the rule of 72 — divide 72 by your rate to get the years needed to double your money (72 ÷ 8 ≈ 9 years). Always compare effective annual rates, not nominal ones: 6% nominal compounded monthly is really 6.17% effective.
Last updated: October 2026.
Modelling withdrawals: how long will my savings last?
Growth works in reverse too. Take $500,000 earning 6% and withdraw $3,000 a month: the pot lasts about 30 years — because each month's interest covers part of the withdrawal. Withdraw less than the monthly interest and the pot never runs dry. The maths is the same annuity formula with the sign flipped: FV = P(1+r/n)nt − W×[((1+r/n)nt−1)/(r/n)], where W is the monthly withdrawal.
Common questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Each period's gains start earning their own returns, so growth accelerates over time.
How is compound interest calculated?
The formula is A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency per year, and t is years. Regular contributions each compound for their remaining time.
What is a realistic annual return?
Global stock markets have historically returned around 7–10% per year before inflation over long periods. Savings accounts typically pay 1–5%. Higher expected returns always come with higher risk.
How often should interest compound?
More frequent compounding grows money slightly faster, but the difference is small next to the rate itself and the time invested. Starting early matters far more than compounding frequency.
Is this calculator free?
Yes — 100% free, no signup. All calculations happen in your browser.
How much will $200 a month grow in 20 years?
At a 7% average annual return, $200 a month grows to about $104,185 in 20 years — while you only paid in $48,000. The other ~$56,000 is pure compounding. Try it yourself: enter 200, 7 and 20 in the calculator above and watch the growth chart.
How do I calculate compound interest with monthly contributions?
Two parts: your starting amount grows as P(1 + r/n)^nt, and each monthly deposit grows as an annuity — PMT × [((1 + r/n)^nt − 1) / (r/n)]. Add both together for the future value. The calculator above does both steps instantly with a year-by-year breakdown.
What rate of return should I type into the calculator?
For long-term stock-market investing, 7% is the classic planning number (roughly 10% historic returns minus inflation). For a high-yield savings account, use 4–5%. Try 6% vs 8% in the calculator to see how much each percentage point is worth over your timeframe.
How much will my monthly deposits grow to with compound interest?
A compound interest calculator with monthly contributions shows exactly how your monthly deposits grow: enter your monthly deposit, the expected annual rate, and the number of years, and you get a year-by-year breakdown plus a visual growth chart. Monthly contributions boost the final balance dramatically because every deposit starts compounding the moment it is added.
Does compounding daily instead of monthly make a big difference?
Barely. On $10,000 at 7% over 20 years, moving from annual to monthly compounding adds about $1,690 — but moving from monthly to daily adds only about $160 more. Frequency matters far less than the rate itself and the time invested. Starting early beats compounding finely.
What is the difference between a nominal and an effective interest rate?
The nominal rate is the advertised number; the effective rate is what you actually earn after compounding. 6% nominal compounded monthly is 6.17% effective, calculated as (1 + 0.06/12)^12 − 1. Always compare effective rates when choosing between accounts.
Show me a worked example: $5,000 plus $200 a month at 8% for 20 years
Two legs: the $5,000 lump sum grows to about $24,650, and the $200 monthly deposits grow to about $117,790 — $142,440 total from $53,000 paid in. Every deposit compounds from the month it lands, which is why the monthly leg does most of the work.
What is the money multiple?
Your future value divided by everything you put in. A 2.0× money multiple means compounding doubled your deposits. The calculator's "Growth multiple" stat shows yours — longer timeframes and higher rates push it up fast.
What is the difference between monthly contributions and lump-sum investing?
With a lump sum, the full amount compounds from day one, so it usually grows the most. Monthly contributions start smaller but build steadily — and for most people, investing a fixed amount each month (dollar-cost averaging) is the realistic way to build long-term wealth without timing the market.
Projections only, not financial advice. Real returns vary and all investing involves risk.
The compound interest formulas, with real numbers
Compound interest means earning returns on your returns: each period's interest joins the principal, so the base that grows keeps getting bigger. Simple interest pays only on the original amount; compounding pays on an ever-growing balance — that acceleration is why Einstein supposedly called it the eighth wonder of the world.
Two formulas cover everything. Lump sum: A = P(1 + r/n)nt, where P = starting principal, r = annual rate, n = compounds per year, t = years. Monthly contributions: FV = PMT × [((1+r)n − 1) ÷ r], with r = monthly rate and n = total months — add the lump-sum result for any starting balance.
Worked example: $1,000 invested once at 7% compounded yearly for 10 years: 1000 × 1.0710 = 1000 × 1.9672 = $1,967. Now add $100/month: monthly r = 0.07 ÷ 12 = 0.005833, n = 120 → ((1.005833)120 − 1) ÷ 0.005833 ≈ (2.0097 − 1) ÷ 0.005833 ≈ 173.1 → $17,310. Combined ≈ $19,277 from $13,000 actually deposited — compounding contributed over $6,200, nearly half the final balance.
Practical tips: starting 10 years earlier beats doubling your contributions later — time is the dominant variable. Compounding frequency barely matters (monthly vs daily differs by ~0.1% at 7%), so don't chase it. Limitation: the math ignores inflation, taxes, and fees, which all eat real returns — subtract ~2–3% for inflation when judging what the future balance will actually buy.
The Rule of 72 — compounding in your head: divide 72 by your annual rate to estimate doubling time: at 7%, money doubles in roughly 72 ÷ 7 ≈ 10.3 years (actual: 10.24 — remarkably close). At 10%, ~7.2 years; at 3% (a savings account), ~24 years. The rule also exposes debt: a 22% APR credit card doubles what you owe every ~3.3 years if unpaid. Two subtleties the basic formula hides: sequence risk — two investors with identical average returns can end with very different balances if one's bad years come early while withdrawing (retirees) versus contributing (young savers); and real vs nominal — 7% nominal with 3% inflation is ~3.9% real (not 4%, because (1.07/1.03)−1 compounds too). For quick sanity checks the Rule of 72 beats any calculator; for real planning, always model in inflation-adjusted terms.