Compound Interest Calculator
Project how a starting balance plus monthly contributions grows over time — see contributions and interest separately, year by year.
7% ≈ long-run stock market average after inflation
Balance in 20 years
$300,851
You contributed
$130,000
Interest earned
$170,851
131% on top of contributions
The math behind the chart
Each month the calculator grows your balance by 1/12 of the annual rate (or once a year, if you choose annual compounding) and then adds your contribution. The blue band is money you put in; the green band is money the money made. Watch where the green band overtakes the blue — that crossover is compounding doing the heavy lifting.
A concrete example: $10,000 to start, $500 a month, 7% for 20 years ends around $301,000 — $130,000 contributed and roughly $171,000 earned. Stretch it to 30 years and the balance roughly doubles again. Time is the ingredient you can't buy back, which is why "start now" beats "start big."
Picking honest assumptions
The rate you choose is a forecast, not a promise. Long-run U.S. stock returns average about 10% before inflation, ~7% after; bonds and savings accounts less. Two useful habits: run the projection at a pessimistic and an optimistic rate to see the range, and revisit yearly with real balances. If the money has a deadline — a house down payment, tuition — pair this with the savings goal calculator to solve for the monthly amount instead.
Where this fits in the bigger picture
Compounding works on the asset side of your net worth — and in reverse on the debt side, where credit card APRs compound against you (the case for the debt payoff calculator). Stoia's job is keeping both sides visible in one place, so growth here isn't silently offset by interest there.
Frequently asked questions
What is compound interest?
Interest that earns interest. When returns are added to your balance, the next period's growth is calculated on the bigger number — so growth accelerates over time. Albert Einstein probably never called it the eighth wonder of the world, but the math earns the reputation anyway.
What annual return should I assume?
For long-term stock index investing, 6–8% after inflation is the common planning range (the S&P 500 has averaged about 10% nominal over long periods). For a high-yield savings account, use its current APY. Being conservative in projections beats being disappointed in retirement.
How does monthly vs. annual compounding change the result?
Monthly compounding applies 1/12 of the rate twelve times a year, which yields slightly more than one annual application — for typical rates the gap is small (7% compounded monthly ≈ 7.23% effective annual). Contribution frequency and rate matter far more than compounding frequency.
Does this account for inflation?
Only through your rate choice. If you enter a nominal return (say 10%), the result is in future dollars; if you enter a real return (say 7%), the result is roughly in today's purchasing power. Using real returns is usually the more honest picture.
Does this calculator include taxes?
No — returns in tax-advantaged accounts (401(k), Roth IRA, HSA) compound untaxed, while taxable brokerage gains lose some growth to taxes along the way. Treat results as a ceiling for taxable accounts.
What's the biggest lever: rate, time, or contributions?
Early on, contributions dominate. Past a decade, time does — the curve steepens because interest starts out-earning your deposits. The practical takeaway: starting now with less beats starting later with more.
Want this to update itself?
Stoia connects your real accounts and keeps the full picture current — net worth, budgets, and goals. Launching in 2026.