Compound Interest Calculator
Compound interest is the engine of long-term wealth: your earnings generate their own earnings. Enter your starting amount, monthly contribution, and expected return to project your portfolio’s growth year by year.
Ending Balance
$691,150
Total Contributions
$190,000
Interest Earned
$501,150
Inflation-Adjusted Value
$329,501
in today’s dollars
Portfolio Growth
Contributions vs. Earnings
Assumptions & limitations
- Contributions are added at the end of each month, after that month’s growth.
- The return is applied uniformly — real markets are volatile and sequence of returns matters.
- Taxes and investment fees are not modeled; the inflation adjustment uses a constant rate.
Compound interest formula
FV = P(1 + r/n)^{nt} + PMT × [((1 + i)^{m} − 1) / i]P is your initial principal, r the annual rate, n compounding periods per year, t years, PMT the monthly contribution, i the effective monthly rate, and m the number of months. We simulate month-by-month so contributions compound at the exact frequency you select.
How It Works
- 1Each month, your balance earns a return based on your annual rate and compounding frequency, then your monthly contribution is added.
- 2Over time the "Interest Earned" portion overtakes contributions — that crossover is the power of compounding.
- 3The inflation-adjusted value discounts your ending balance so you can see what it would buy in today’s dollars.
Frequently Asked Questions
What annual return should I use?
The S&P 500 has historically returned about 10% annually before inflation (roughly 7% after). Conservative planners often model 5–7%.
Does compounding frequency matter much?
Less than most people expect. Moving from annual to daily compounding at 7% adds only about 0.25 percentage points of effective yield. Consistent contributions matter far more.
Is this calculator adjusted for taxes?
No. Returns inside tax-advantaged accounts (401(k), IRA) compound tax-free or tax-deferred; taxable accounts will grow more slowly after taxes on dividends and realized gains.
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