Compound Interest Calculator
See how a lump sum and monthly contributions grow over time — and exactly how much waiting one year costs you.
Your investment projection
- Total contributions—
- Interest earned—
- Same money at simple interest—
- Extra from compounding—
What this means
Related guides
What is compound interest?
Compound interest is interest on interest. Instead of paying you a flat amount each year, your earnings get added to the principal and start earning too. Over long periods this creates exponential — not linear — growth.
Albert Einstein reportedly called it "the eighth wonder of the world." Whether or not he said it, the math is undeniable: over 30 years at 7%, most of your final balance comes from compounding, not from your own contributions.
The formula
FV = P(1 + r/n)nt + PMT × [ ((1 + r/n)nt − 1) / (r/n) ]
- P = initial principal, PMT = periodic contribution
- r = annual rate, n = compounds per year, t = years
Worked example
$10,000 initial, $300/month, 7%, monthly compounding, 20 years:
- Contributions = $10,000 + $300 × 240 = $82,000
- Future value = $10,000×(1.005833)^240 + $300×((1.005833)^240−1)/0.005833 ≈ $196,000
- Interest earned ≈ $196,000 − $82,000 = $114,000 — more than half your total
The cost of waiting
Delaying by a single year has an outsized effect because the last year's compounding is the largest of all. This is why the single most important factor in investing is time, not how clever you are with returns.