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 paid on both your original principal and on the interest already earned. The longer your money compounds, the more dramatic the curve, a phenomenon 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.