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Compound interest is often called the most powerful force in personal finance — interest earns interest on itself over time, so growth accelerates the longer money stays invested. This calculator takes a starting principal, an annual interest rate, a number of years, and an optional monthly contribution, and shows exactly how the balance grows month by month, compounded monthly.
It also breaks out exactly how much of the final balance came from your own contributions versus interest earned — the part compound interest actually contributed, which is often larger than people expect over long timeframes.
How it works
Enter your starting principal, the annual interest rate, and the number of years you'll let it grow. Optionally add a monthly contribution to model regular ongoing savings. The calculator compounds interest monthly, adding any contribution each month, and shows the final balance, total contributions, total interest earned, and a year-by-year balance breakdown.
- Enter your starting principal, annual rate and number of years.
- Optionally add a monthly contribution.
- Review the final balance, interest earned and year-by-year breakdown.
Examples
A lump-sum investment
$10,000 invested at 5% annual interest, compounded monthly, for 10 years with no further contributions grows to $16,470.09 — $6,470.09 in interest on top of the original principal.
Regular monthly contributions from zero
Starting from $0 and contributing $100 every month with no interest at all still totals $1,200 after a year — the calculator separates out exactly how much of any final balance is your own contributions versus interest earned.
Who should use it
- Projecting how a savings or investment balance grows over time.
- Comparing the impact of different monthly contribution amounts.
- Understanding how much of long-term growth comes from interest versus your own contributions.
Industry applications
- Personal finance and retirement planning
- Savings account and investment comparisons
- Financial education
Advantages
- Models both a lump-sum principal and ongoing monthly contributions together.
- Separates total interest earned from total contributions, showing exactly where the final balance came from.
- Provides a year-by-year balance breakdown, not just a final number.
Limitations
- Assumes a constant interest rate for the entire period, not variable real-world returns.
- Doesn't account for taxes, fees, or inflation.
- Monthly compounding only — doesn't model daily, quarterly or annual compounding separately.
Common mistakes to avoid
- Underestimating how much monthly contributions add up to over many years, focusing only on the interest rate.
- Forgetting that this shows nominal returns, not accounting for taxes or inflation.
- Assuming a higher one-time principal always beats regular contributions over a long enough timeframe, without actually running the numbers.
Best practices
- Compare scenarios with different contribution amounts to see how much small, regular increases actually matter over time.
- Remember this models nominal growth — consider taxes and inflation separately when planning real purchasing power.
- Recalculate periodically as your actual rate, contribution amount, or timeframe changes.
Tips
- Run the numbers with a few different monthly contribution amounts to see how sensitive the final balance is to small changes.
- Remember that a nominal projection doesn't account for inflation — a future dollar amount buys less than the same amount today.