Compound interest calculator with monthly contributions
Enter a starting amount, a monthly contribution, a rate and a number of years to see the end balance and how much of it is growth.
Year-by-year growth
| Year | Contributed | Growth | Balance |
|---|
The short answer
Compound interest adds each period's growth to the balance, so the growth itself earns returns. Balance = amount × (1 + rate ÷ n)^(n × years), where n is how often interest compounds per year, plus the growth on each monthly contribution. For example, $10,000 at 5% compounded yearly becomes $16,288.95 after 10 years.
How it is calculated
Single amount: A = P × (1 + r ÷ n)n × t
r = annual rate, n = compounding periods per year (12 monthly, 4 quarterly, 1 annually), t = years.
Monthly contributions are added at the end of each month and compound from then on.
Worked example
You open a brokerage account with $20,000, add $1,000 a month, and assume 7% a year compounded monthly for 20 years.
- Total contributed: $20,000 + $1,000 × 12 × 20 = $260,000
- Balance after 10 years: $213,278.03, of which $73,278.03 is growth
- Balance after 20 years: $601,701.44
- Total growth: $601,701.44 − $260,000 = $341,701.44
End balance: $601,701.44, of which $341,701.44 is growth.
Quick reference table
| Years | Paid in | 3% | 5% | 7% | 10% |
|---|---|---|---|---|---|
| 5 years | 60,000 | 64,647 | 68,006 | 71,593 | 77,437 |
| 10 years | 120,000 | 139,741 | 155,282 | 173,085 | 204,845 |
| 20 years | 240,000 | 328,302 | 411,034 | 520,927 | 759,369 |
| 30 years | 360,000 | 582,737 | 832,259 | 1,219,971 | 2,260,488 |
Special cases and common mistakes
- Time beats amount. Running the example for 10 years instead of 20 gives $213,278.03 instead of $601,701.44. Half the time gives far less than half the balance.
- Rule of 72: divide 72 by the rate to estimate the years to double. At 7% that is about 10.3 years; the exact figure is 10.24.
- The quoted rate is not the yield. 12% compounded monthly is 12.68% a year in practice. Use the effective annual yield to compare offers that compound differently.
- Returns are not guaranteed. The calculator assumes the same rate every year and ignores fees, taxes and inflation. Use it to compare scenarios, not to predict a figure.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is paid on the original amount only; compound interest is paid on the amount plus past interest. $10,000 at 5% for 10 years: simple gives $15,000, compounded yearly gives $16,288.95.
How much will $1,000 a month be worth in 20 years?
At 5% compounded monthly, about $411,034, of which you paid in $240,000.
Does daily compounding make a big difference?
Not much. $10,000 at 6% for 10 years: monthly $18,193.97, daily $18,220.29.
When are monthly contributions added?
At the end of each month, so a contribution starts earning from the following month. Contributions at the start of the month would grow slightly more.