Example compound interest calculation
If you start with $5,000, add $300 per month, and earn an average 7% annual return for 20 years, contributions and compounding can turn small habits into a much larger future balance.
Long-term growth
Compound interest calculator
A compound interest calculator shows how principal, recurring contributions, time, and reinvested returns work together. It is useful for investing, saving, and financial planning scenarios.
Calculate future investment growth from starting balance, monthly contributions, time horizon, and expected annual return.
Principal + contributions + reinvested returns = future value
Compound interest mistakes to avoid
- Using returns that are too optimistic for the asset class.
- Ignoring fees, taxes, and inflation.
- Underestimating how much contribution consistency affects the final result.
How to use the compound interest calculator
- 1. Enter your starting balance.
- 2. Add monthly or recurring contributions.
- 3. Choose the time horizon in years.
- 4. Test realistic annual return assumptions.
- 5. Compare total contributions with projected investment growth.
Compound interest calculator FAQ
What is compound interest?
Compound interest is growth earned on both your original money and previous growth that remains invested.
Can I include monthly contributions?
Yes. Monthly contributions are important because long-term wealth often comes from both compounding and consistent saving.
What annual return should I use?
Use a range instead of one number. Conservative, moderate, and optimistic scenarios make the result more useful.