Financial · Live
Compound interest,
visualized.
Project how an investment grows when interest is reinvested. Adjust the inputs — every number, the chart, and the year-by-year schedule update instantly.
Inputs
Tune the numbers
Recurring contributions
Future value
after 20 yrs
Growth chart
Year by year
Ledger
Yearly breakdown
| Year | Start | Contributed | Interest | End balance |
|---|---|---|---|---|
| Y1 | $10,000.00 | $2,400.00 | $801.42 | $13,201.42 |
| Y2 | $13,201.42 | $2,400.00 | $1,032.85 | $16,634.27 |
| Y3 | $16,634.27 | $2,400.00 | $1,281.01 | $20,315.28 |
| Y4 | $20,315.28 | $2,400.00 | $1,547.11 | $24,262.39 |
| Y5 | $24,262.39 | $2,400.00 | $1,832.45 | $28,494.83 |
| Y6 | $28,494.83 | $2,400.00 | $2,138.41 | $33,033.24 |
| Y7 | $33,033.24 | $2,400.00 | $2,466.49 | $37,899.74 |
| Y8 | $37,899.74 | $2,400.00 | $2,818.29 | $43,118.03 |
| Y9 | $43,118.03 | $2,400.00 | $3,195.52 | $48,713.55 |
| Y10 | $48,713.55 | $2,400.00 | $3,600.02 | $54,713.58 |
| Y11 | $54,713.58 | $2,400.00 | $4,033.77 | $61,147.34 |
| Y12 | $61,147.34 | $2,400.00 | $4,498.86 | $68,046.20 |
| Y13 | $68,046.20 | $2,400.00 | $4,997.58 | $75,443.79 |
| Y14 | $75,443.79 | $2,400.00 | $5,532.35 | $83,376.14 |
| Y15 | $83,376.14 | $2,400.00 | $6,105.79 | $91,881.93 |
| Y16 | $91,881.93 | $2,400.00 | $6,720.67 | $101,002.60 |
| Y17 | $101,002.60 | $2,400.00 | $7,380.00 | $110,782.60 |
| Y18 | $110,782.60 | $2,400.00 | $8,087.00 | $121,269.60 |
| Y19 | $121,269.60 | $2,400.00 | $8,845.11 | $132,514.70 |
| Y20 | $132,514.70 | $2,400.00 | $9,658.02 | $144,572.72 |
Field guide
How compound interest actually works.
Compound interest is interest calculated on both your original principal and the interest already earned, using A = P × (1 + r ⁄ n)n·t. The longer money compounds, the more dramatic the growth curve — a pattern Albert Einstein reportedly called the “eighth wonder of the world.”
The base formula
Without contributions, the future value A after t years is:
- P: initial principal
- r: annual rate (decimal, e.g. 0.07 for 7%)
- n: compounding periods per year (12 = monthly)
- t: number of years
With recurring contributions
Add a recurring contribution PMT each compounding period, and the formula extends:
type = 0 when contributions land at the end of each period (the default for most automated savings) and 1 when at the beginning. Beginning-of-period contributions earn one extra period of interest.
Continuous compounding
As n approaches infinity, the formula collapses to its elegant continuous form:
In practice, the gap between daily and continuous compounding is measured in basis points. It's the theoretical ceiling — useful for understanding the limit, not for picking an account.
Why frequency matters less than you'd think
A 7% nominal rate yields an effective annual rate of about 7.23% compounded monthly, and 7.25% compounded daily. The denser the compounding, the higher the yield, but the gains taper quickly. Time and rate are the dominant variables.
Worked example
Deposit $10,000 at 7% compounded monthly for 20 years, no additional contributions:
Add $200 a month and the future value climbs to roughly $144,800. Of that, only $58,000 came out of your pocket — the remaining $76,800 is interest on interest.
Tips for using this calculator
- Use a realistic rate. The S&P 500 has averaged ~10% nominal and ~7% real (after inflation) over the long term.
- Match contribution frequency to how you actually save — monthly via payroll is the most common.
- Vary the time horizon. Compounding's most powerful lever is almost always time, not rate.
Disclaimer
This calculator provides estimates for educational purposes. It assumes a constant rate of return and ignores taxes and fees. Actual investment results vary.
These are standard, non-proprietary time-value-of-money formulas used industry-wide, cross-checked against SEC/FINRA investor-education materials rather than a single regulatory threshold that changes yearly. Rates, thresholds, and formulas are checked against SEC Office of Investor Education and updated when the underlying rules change.