See exactly how your savings or investments grow over time with the power of compounding. Adjust rate, contributions, and time period to plan your financial future.
See how your money grows over time with the power of compounding. Start early, grow faster.
| Year | Deposited | Interest earned | Total value |
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The formula used is: A = P(1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) − 1] / (r/n) — where P is the principal, r is the annual interest rate, n is the compounding frequency, t is time in years, and PMT is the monthly contribution.
The most powerful factor in compound interest is time. The earlier you start, the more years your money has to compound. A 10-year head start can be worth more than doubling your monthly contributions later on.
The compounding frequency also matters — monthly compounding yields slightly more than annual compounding at the same stated rate, because interest is added and begins earning returns more frequently.
Compound interest is interest earned on interest. When you save or invest, you earn a return on your original amount — and in each following period you also earn a return on the returns you have already accumulated. Over long periods this compounding snowballs, and the growth curve bends increasingly upward rather than rising in a straight line.
Three factors drive the outcome: how much you start with and add, the rate of return, and — most powerfully — time. Because compounding accelerates, the years at the end contribute far more growth than the years at the start. This is why beginning early, even with small amounts, usually beats saving larger amounts later. The frequency of compounding also matters: interest that compounds monthly grows a little faster than the same rate compounded annually.
A one-off deposit compounds on its own, but adding a fixed amount regularly changes the picture dramatically. Each contribution starts its own compounding journey, so a steady monthly habit builds momentum that a single lump sum rarely matches. This calculator lets you see the difference between your total contributions and the growth those contributions generated — the gap between the two is the compounding at work.
Imagine you invest $5,000 and add $200 a month for 20 years at a 7% annual return. Your own contributions total $53,000, but the balance grows to roughly $124,000 — meaning about $71,000 came from compounding alone. Start ten years earlier and the same habit could push the final balance past $280,000 for only about $24,000 in extra contributions. That gap is the reward for giving your money more time.
What is the difference between simple and compound interest?
Simple interest is calculated only on your original amount. Compound interest is calculated on your original amount plus all previously earned interest, so it grows faster over time.
Does compounding frequency really matter?
Yes, though less than rate and time. The more often interest compounds — daily, monthly, or annually — the more you earn, because earnings start compounding sooner.
Why does starting early matter so much?
Because compounding accelerates, early contributions have more time to snowball. Money invested in your twenties can outgrow larger sums invested decades later.