Money

Compound Interest Calculator

See how a starting amount and regular contributions grow over time, what a yearly fee takes out of the result, and how much the answer moves if returns come in lower or higher than you assume. Everything runs in your browser, and nothing you enter is sent to a server.

Your plan

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$

Contributions are made

An assumption, not a promise. 7% is a round number to start from. Change it to whatever you want to test.

A fund or adviser fee. The 0.5% shown is only an example. Use your own, or 0 for none.

If returns are different from your assumption

Year by year

What this does and doesn't do: returns are not guaranteed. This is a steady-rate projection, and real investments go up and down, sometimes by a lot, so the actual result can land well outside the range shown. It does not include tax, changing fees, or contributions that grow over time. It is a calculator, not advice, and it doesn't recommend any product.

How compound interest works

Compound interest means you earn a return on your earlier returns as well as on the money you put in. For a single lump sum the balance is starting amount × (1 + rate ÷ n)n × years, where n is how many times a year the return is added. For example, $10,000 at 7% a year, compounded annually for 10 years, becomes about $19,672, of which $9,672 is growth.

Regular contributions add to this. Each deposit starts earning from the day it goes in, so early deposits do more work than late ones. That's why the growth part of the balance is small in the first years and larger in the last ones.

Defaults, worked through

With the starting settings ($10,000 to begin, $500 a month at the end of each month, 7% a year compounded monthly, a 0.5% annual fee, 20 years) you put in $130,000 in total and end with about $281,775. Without the fee the same plan reaches about $300,851, so the fee costs about $19,076. At returns 2 points lower and higher the result is about $218,617 and $367,912. Those numbers come from the assumptions, not from any forecast.

How the fee is modelled

The fee is taken off the return each year: a 7% return with a 0.5% fee compounds at 6.5%. The “fees cost you” figure is the balance with no fee minus the balance with the fee, with everything else the same. Real funds may charge in other ways, such as on the balance, per transaction or as a flat amount, so if yours does, treat this as an estimate.

Why a range?

Nobody knows what return they will get. The range reruns your plan with the return 2 percentage points lower and higher (the fee stays the same), so you can see how much the answer depends on one number you had to guess. Real returns vary from year to year, so even the range is not a limit.

Related tools

If you have a target amount and want to know when you'll reach it, try the Savings Goal Calculator. If you're planning for work-optional years, the FIRE Calculator uses the same inflation-adjusted (“real”) return maths as the inflation view here, so the two tools agree.

Frequently asked questions

What is compound interest?

Compound interest is a return earned on both your original money and the returns it has already earned. Because each period's return is added to the balance, the next period's return is calculated on a bigger amount, and growth speeds up over time.

How does the calculator work out the balance?

It steps through your plan month by month. Your annual return is compounded at the frequency you choose, converted to an equivalent monthly growth rate, and your contributions are added each month or each year, at the start or the end of the period, as you set. Year-end balances go into the chart and table.

How are fees handled?

The annual fee is taken off your return every year, so a 7% return with a 0.5% fee compounds at 6.5%. The "fees cost you" figure is the balance with no fee minus the balance with the fee, everything else the same. Fees that work differently, such as a flat dollar charge, will not match this exactly.

Does compounding more often make a big difference?

Not much. $1,000 at 5% a year for 10 years becomes about $1,629 compounded annually, $1,647 monthly and $1,649 daily. The rate and the number of years matter far more than how often the return is added.

What return should I enter?

There is no right answer, and returns are not guaranteed. The 7% starting figure is only a round number to begin from, not a forecast or a recommendation. Try several rates, and look at the lower and higher cases shown under the result to see how much the outcome depends on your guess.

Why does the page show a range?

It reruns your plan with the return 2 percentage points lower and higher, keeping the fee. That shows how sensitive the result is to one assumed number. Real returns also change from year to year, so actual results can fall outside the range.

What does the inflation option show?

Inflation is off by default because it is unpredictable. Tick "Show the effect of inflation" and enter a rate to see how much a dollar invested grows compared with how much prices grow, what your final balance is worth in today's money, and the return you'd need to earn just to keep pace. It uses the same real-return formula, (1 + return) ÷ (1 + inflation) − 1, as the FIRE calculator.

Does it include tax?

No. The results are before tax, and the calculator assumes your contributions and fee stay the same every year. It is a general guide and isn't financial advice.

Is my data saved or sent anywhere?

No. Everything you enter stays in your browser and isn't sent to a server. It isn't saved either, so refreshing the page clears it.

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