Compound Interest Calculator — Growth of Savings Over Time
See how an initial deposit plus monthly contributions grows with compounding — final balance, total contributions and interest earned.
Last reviewed 2026-10-01. Rates change — verify against the official sources linked below before relying on these figures.
What this is based on
- Monthly compounding, contributions at month-end, constant annual return.
- Taxes, fees and inflation are not included — a 7% nominal return is roughly 4–5% real after inflation.
- Real investment returns fluctuate year to year; the model shows a smoothed path, not a prediction.
Why time beats amount in compounding
Compounding is exponential — the last years do most of the work. $10,000 plus $300/month at 7% grows to about $37k in 10 years but $167k in 20 and $380k in 30. The second decade adds more than three times what the first did. Starting five years earlier is worth more than doubling the monthly contribution later.
This is the uncomfortable math behind 'start early': the person who invests $300/month from age 25 to 35 and stops often ends richer than someone who starts at 35 and invests the same amount until 65 — despite contributing less than half as much money.
What return should you assume?
The S&P 500 has returned ~10% nominal historically, ~7% after inflation. High-yield savings run ~4–5%, bonds ~4–6%. Anything projecting 15%+ sustained is not an investment plan, it's a hope — build the plan on 7–8% and let upside be upside.
The silent drag: fees and inflation
A 1% annual fee doesn't cost 1% — at 7% returns it cuts your 30-year balance by roughly 25%. That's why the index-fund-vs-managed-fund debate matters more than any stock pick. And remember the number that counts is purchasing power: $380k in 30 years buys what ~$190k buys today at 2.5% inflation.
Frequently asked questions
- How does compound interest work?
- Interest earns interest: each period's return is calculated on the growing balance, not just the principal. Over long horizons growth becomes exponential — small early differences become large late ones.
- How much will $10,000 grow in 20 years?
- At 7% compounded monthly: about $40,400. Add $300/month contributions and it's roughly $196,000.
- What is the rule of 72?
- Divide 72 by your annual return to estimate doubling time — at 7%, money doubles roughly every 10 years.
- Is monthly or annual compounding better?
- More frequent compounding earns slightly more — at 7% the difference between monthly and annual compounding is small (~0.3%/year) but compounds over decades.
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