Compound Interest Calculator
See how an investment grows from a starting amount plus regular contributions, with an optional yearly contribution increase, in today's dollars and after tax.
Future balance
What you would have at the end.
$691,150.47
- Total contributions
- $190,000.00
- Interest earned
- $501,150.47
- Future balance (today's dollars)
The nominal balance discounted for inflation, so you can see its purchasing power today.
- $691,150.47
- After-tax balance
The nominal balance after a one-time tax on the gains. A separate figure from the inflation-adjusted value.
- $691,150.47
- Estimated tax on gains
Tax rate times the gains (final balance minus total contributions).
- $0.00
Compounding frequency comparison at your inputs
| Compounds | Future balance | Interest earned |
|---|---|---|
| Annually | $660,848.85 | $470,848.85 |
| Quarterly | $685,332.19 | $495,332.19 |
| Monthly | $691,150.47 | $501,150.47 |
| Daily | $694,016.97 (highest) | $504,016.97 (highest) |
Quick answer: With the example inputs this page loads by default, the headline result (Future balance) comes to $691,150.47. See how an investment grows from a starting amount plus regular contributions, with an optional yearly contribution increase, in today's dollars and after tax. Change any input above and every figure updates instantly in your browser.
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Fact-check: results on this page are verified against an independently coded reference oracle that covers all 106 calculators on this site. See how we verify .
Compound interest is the effect of earning returns on your past returns, not just on your original deposit, so a balance grows faster the longer it is left to grow. How large that growth gets depends on your starting amount, how much you add over time, the rate of return, and how often it compounds. This calculator projects the final balance and shows it both in today's dollars and after tax.
The takeaway in one line
Growth, not contributions: 73 percent of the final balance is growth
Assumes 7% annual return, 30 years, $500 monthly contributions. Illustrative estimate, not advice.
Assumptions
- Interest compounds at the frequency you choose, and contributions are added at the frequency you choose, at the start or end of each period as selected.
- When the compounding and contribution frequencies differ, the annual rate is converted to an exact effective rate per contribution period, so the result is correct for any mix of the two (for example, monthly contributions with daily compounding).
- The yearly contribution increase steps up the contribution once per year. The first year uses the base amount, and the increase applies from the second year onward, compounding year over year. Within a year the contribution is level.
- The interest rate is constant for the whole period, and the number of years is treated as a whole number.
- The future balance, total contributions, and interest earned are nominal. The inflation-adjusted value discounts only the nominal final balance to today's dollars, dividing by (1 + inflation) raised to the number of years; the interest rate, your contributions, and the year-by-year schedule are not separately adjusted for inflation.
- Tax is applied once at the end to the gains only, never below zero, at the rate you set. Gains are the final balance minus your total contributions, where total contributions means your starting amount plus every periodic contribution you make. The after-tax balance is the nominal balance minus that tax; it is a single end-of-period tax, not a year-by-year tax drag.
- Inflation and tax are shown as independent single-factor adjustments: the inflation-adjusted value ignores tax and the after-tax value ignores inflation. There is no combined after-tax, inflation-adjusted figure, to keep the outputs clear.
- Not modeled: variable returns or sequence-of-returns risk (one steady rate is used, not real-world market swings), investment fees or expense ratios, and any year-by-year or transaction-level taxes beyond the single end tax on gains. Every result is rounded to the nearest cent.
- This is an estimate for educational purposes only, not financial, legal, or tax advice. Real investment returns vary from year to year, and your actual taxes and fees will differ. Consult a qualified professional for guidance specific to your situation.
Key terms
Definitions for the terms this calculator uses, in our finance glossary .
How does compound interest grow your money?
Compound interest earns interest on your interest. A balance growing at rate r per period becomes
balance × (1 + r) each period, so growth accelerates over time. This calculator adds two pieces: a
starting amount that compounds, and a recurring contribution that builds up as an annuity.
The future value is:
FV = P · (1 + i/m)^(m·years) + PMT · [((1 + rPer)^n − 1) / rPer]
where P is the starting amount, i the nominal annual rate, m the compounding periods per year, PMT the contribution, and n the number of contributions.
The detail most calculators get wrong is mixing frequencies. If you contribute at a different rhythm than the interest compounds (say monthly contributions with daily compounding), the contribution has to earn the effective rate over its own period, not the nominal rate. We convert it exactly:
rPer = (1 + i/m)^(m/k) − 1
where k is the contributions per year. When the two frequencies match, this reduces to the
simple i/m.
Worked example
$10,000 to start, $6,000 contributed once a year, 6% nominal rate compounded monthly, for 10 years:
- Effective annual rate (because interest compounds monthly):
(1 + 0.06/12)^12 − 1 = 6.16778%, slightly above the nominal 6%. - Starting amount:
10,000 × (1 + 0.06/12)^120 = $18,193.97 - Contributions:
6,000 × ((1.0616778)^10 − 1) / 0.0616778 = $79,710.68 - Future balance =
$18,193.97 + $79,710.68 = $97,904.65
You contributed $70,000 in total, so $27,904.65 is interest. A calculator that applied the plain 6% to the annual contributions would show roughly $911 less, because it would ignore that the money compounds monthly.
Assumptions and limits
The rate is constant, and the headline future balance, total contributions, and interest are nominal. If you set an inflation rate, the calculator also shows the final balance in today’s dollars by discounting it by (1 + inflation) raised to the years; if you set a tax rate, it shows a one-time tax on the gains and the after-tax balance. Those two adjustments are independent, so there is no combined after-tax, inflation-adjusted figure. Investment fees, expense ratios, year-by-year tax drag, and the real-world variability of returns are not modeled, so treat the result as a smooth, best-case projection.
Sources
- Investor.gov (U.S. Securities and Exchange Commission), on compound interest and how investments grow
- Standard time-value-of-money formulas (future value of a lump sum and of an annuity).
- Effective interest rate conversion for differing compounding and contribution frequencies.
Frequently asked questions
- How does compound interest work?
- Compound interest pays interest on both your original money and the interest already earned, so the balance grows faster over time. The longer the money compounds and the more often, the larger the effect.
- Does contributing monthly instead of annually matter?
- Yes, a little. Contributing more often means each dollar is invested for longer on average, so it earns slightly more. This calculator handles any mix of contribution and compounding frequency using an exact effective-rate conversion.
- How does the yearly contribution increase work?
- It raises your contribution once a year. The first year uses the amount you entered, and from the second year onward the contribution grows by the percent you set, compounding each year. So a 500 a month contribution with a 3 percent yearly increase becomes about 515 a month in year two, 530 in year three, and so on. Within a year the contribution stays level.
- How are the inflation-adjusted and after-tax values calculated?
- The inflation-adjusted value, or today's dollars, takes the nominal final balance and divides it by (1 + inflation) raised to the number of years, which shows what that future balance would buy today. The after-tax value applies your tax rate once at the end to the gains only (the final balance minus everything you contributed) and subtracts that tax from the balance. The two are independent: the inflation-adjusted value does not include tax, and the after-tax value does not include inflation, so each shows one effect clearly.
- Does this account for taxes and fees?
- It can estimate a one-time tax on your gains if you set a tax rate, applied at the end. It does not model year-by-year tax drag or investment fees, both of which would lower a real-world result. Leave the tax rate at 0 for a tax-advantaged account such as a Roth, where qualified withdrawals are not taxed.
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By Sam Sage Last reviewed .