Does this calculator compound monthly or yearly?

Monthly. It divides your annual rate by 12, applies that each month, then adds your contribution at the end of the month. This matches how most savings and investment accounts behave.

Is the rate I enter treated as APY or as a nominal rate?

As a nominal annual rate that is then compounded monthly. That means entering 7 produces an effective annual growth of about 7.23 percent. The gap is small at low rates — 5 percent becomes 5.12 percent — but it grows with the rate, so at 10 percent you effectively get 10.47 percent.

Are the results adjusted for inflation?

No. Results are in nominal future dollars. A projected $524,963 after 40 years is worth about $195,512 in today's purchasing power at 2.5 percent inflation. To get an answer already in today's money, enter a real rate instead — roughly your expected return minus expected inflation.

How much difference does starting earlier make?

An enormous one. Contributing $200 a month at 7 percent from age 25 to 65 produces about $524,963. Starting ten years later at 35 produces about $243,994. The extra decade costs roughly $280,968 in final balance, even though it only involves $24,000 more in contributions.

How much of the final balance is interest rather than my own money?

It rises sharply with time. Contributing $200 a month at 7 percent, interest is about 16 percent of the balance after 5 years, 54 percent after 20 years, and 82 percent after 40 years. Compounding does most of the work only if you give it decades.

What is the difference between APR and APY?

APR is a simple annual rate that ignores compounding within the year. APY includes the effect of compounding, so it is the number that reflects what you actually earn. For savings accounts, compare APY to APY.

Does the calculator account for taxes or fees?

No. Investment fees and taxes on interest, dividends or gains all reduce real returns. A simple way to allow for them is to subtract your expected fee percentage from the rate you enter.

When are contributions added — start or end of month?

At the end of each month, after that month's growth is applied. This is the conservative convention. Contributing at the start of each month would produce a slightly higher result.

Is a higher rate or a longer time more important?

Both matter, but time is the lever most people control. Over 30 years at $300 a month, moving from 6 to 7 percent adds roughly $64,637, while adding ten more years at 7 percent adds far more. You cannot choose market returns; you can choose to start now.

Yes. The calculator runs entirely in your browser as client-side JavaScript. Nothing you enter is uploaded to any server.

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Compound Interest Calculator

Q: What return rate should I use?

For a high-yield savings account, use its stated APY. For long-term stock market investing many people model a conservative 6 to 7 percent. Whatever you choose, remember that past performance does not guarantee future returns, and that a lower assumption is safer for planning.

See how your savings or investments grow over time — and how much of that growth is free interest.

Built and maintained by BudgetBee · Updated 2 August 2026 · Formula published below · Runs in your browser — nothing is uploaded

Starting amount ($)

Monthly contribution ($)

Annual return / APY (%)

Years

The short answer

Compound interest means your interest earns interest. The consequence is that growth is not a straight line — it barely registers for years, then becomes the dominant force.

Contributing $200 a month at 7%, after five years only 16% of your balance is interest. After forty years, 82% of it is. You contributed $96,000 and ended with roughly $524,963. The other $428,963 was made by money you had already saved.

What the curve actually looks like

Same inputs throughout: nothing to start, $200 a month, 7% a year.

Interest overtakes your own contributions somewhere around year 18–20.
Years	Balance	You contributed	Interest earned	Interest share
5	$14,318.58	$12,000	$2,318.58	16.2%
10	$34,616.96	$24,000	$10,616.96	30.7%
15	$63,392.46	$36,000	$27,392.46	43.2%
20	$104,185.33	$48,000	$56,185.33	53.9%
25	$162,014.34	$60,000	$102,014.34	63.0%
30	$243,994.20	$72,000	$171,994.20	70.5%
35	$360,210.92	$84,000	$276,210.92	76.7%
40	$524,962.68	$96,000	$428,962.68	81.7%

Look at the last decade in isolation. Between year 30 and year 40 the balance grows by $280,968 — while you contribute only $24,000 of it. That final stretch is where compounding pays for the two boring decades that preceded it, and it is exactly the stretch people give up before reaching.

The cost of waiting ten years

Three people each save $200 a month at 7% and stop at 65. The only difference is when they started.

Starts at	Years saving	Total contributed	Balance at 65
25	40	$96,000	$524,962.68
35	30	$72,000	$243,994.20
45	20	$48,000	$104,185.33

$24,000 of contributions bought $280,968

Starting at 25 rather than 35 means contributing $24,000 more over your life — and finishing with $280,968 more. Nothing else on this page comes close to that leverage, and it is available only once.

The practical version: if you cannot contribute much, contribute something now rather than a lot later. A small automatic transfer that starts today beats a perfect plan that starts in three years.

How much does the rate matter?

$300 a month for 30 years, varying only the annual return:

All contribute the same $108,000 over the period.
Annual return	Final balance	Interest earned
4%	$208,214.82	$100,214.82
6%	$301,354.51	$193,354.51
7%	$365,991.30	$257,991.30
8%	$447,107.83	$339,107.83
10%	$678,146.38	$570,146.38

The spread is dramatic — but be careful what you conclude. You do not get to choose your return. You can choose your contribution, your start date, and your fees, and only the last of those behaves like a rate. Modelling 10% because it produces a nicer number is how plans fail.

What it's actually worth after inflation

This is the part most compound interest calculators quietly skip. Every figure above is in nominal future dollars. It is not what the money will buy.

Expressed in today's purchasing power.
Projected balance	At 2% inflation	At 2.5% inflation	At 3% inflation
$524,962.68 in 40 years	$237,750.57	$195,512.18	$160,930.90
$243,994.20 in 30 years	$134,702.09	$116,322.45	$100,522.38

How to get an answer already in today's money

Enter a real rate instead of a nominal one — roughly your expected return minus expected inflation. For 7% growth with 2.5% inflation, the real rate is about 4.39%. Entering that gives:

20 years → $76,662 in today's money
30 years → $148,886 in today's money
40 years → $260,830 in today's money

Still an excellent outcome for $200 a month — just not half a million dollars of today's purchasing power.

How this calculator does the math

monthly_rate = annual_rate ÷ 100 ÷ 12 months = years × 12 balance = starting_amount contributed = starting_amount repeat once per month: balance = balance × (1 + monthly_rate) + monthly_contribution contributed = contributed + monthly_contribution interest_earned = balance − contributed

Growth is applied first, then the contribution is added — the end-of-month (ordinary annuity) convention, which is the conservative choice. Contributing at the start of each month would produce a slightly larger result.

What the calculator assumes

Assumption	Reality	Effect on your estimate
The rate you enter is nominal, compounded monthly	The field is labelled APY	Entering 7 gives 7.23% effective; 5 gives 5.12%; 10 gives 10.47%. Slightly optimistic
Results are nominal future dollars	Inflation erodes purchasing power	Substantially overstates real value over long horizons — see above
A single constant return every month	Markets fluctuate; savings APYs change	Real paths are bumpy; sequence of returns matters near the end
No taxes	Interest, dividends and gains are often taxable	Overstates growth outside tax-sheltered accounts
No fees	Funds and platforms charge fees	Overstates growth; subtract your fee from the rate you enter
Contributions never change	People raise contributions as income grows	Understates the result for most savers

The last two pull in opposite directions and, for many people, roughly cancel. The inflation point does not cancel — it is the one that most changes how you should read the number.

Put it to work

Open a brokerage or high-yield account

Compounding only helps if your money is actually invested or earning a real rate. (Placeholder — insert your vetted affiliate offer + disclosure.)

Compare accounts →

Glossary

Compound interest: Interest calculated on your original amount and on interest already earned. The reason growth accelerates instead of staying linear.
Simple interest: Interest paid only on the original principal. Over 40 years the difference between simple and compound is the difference between a modest sum and a life-changing one.
APR vs APY: APR is a plain annual rate ignoring in-year compounding. APY includes compounding, so it reflects what you actually earn. Compare savings accounts APY to APY.
Nominal rate: A stated annual rate before accounting for compounding frequency or inflation. This calculator treats your input as nominal and compounds it monthly.
Real rate: Your return after inflation — approximately nominal rate minus inflation. Enter this if you want the answer in today's purchasing power.
Principal: Your starting amount, before any growth or contributions.
Ordinary annuity: A series of payments made at the end of each period. This calculator uses that convention for your monthly contributions.
Sequence of returns risk: The risk that poor returns arriving early in retirement — or right before you need the money — damage the outcome far more than the same returns arriving later.

Frequently asked questions

What return rate should I use?

For a high-yield savings account, its APY. For long-term investing, many people model a conservative 6–7%. Past performance is not a guarantee, and a lower assumption is safer for planning.

Does it compound monthly or yearly?

Monthly — the annual rate is divided by 12, applied each month, then your contribution is added at month end.

Is my rate treated as APY or nominal?

As nominal, then compounded monthly. Entering 7 gives about 7.23% effective; 5 gives 5.12%; 10 gives 10.47%. See assumptions.

Are results adjusted for inflation?

No — they are nominal future dollars. $524,963 in 40 years is about $195,512 in today's money at 2.5% inflation. Full detail here, including how to get a today's-money answer.

How much does starting earlier matter?

Hugely. $200/mo at 7% from 25 → about $524,963 at 65. From 35 → about $243,994. Ten years costs roughly $280,968.

How much of my balance ends up being interest?

About 16% after 5 years, 54% after 20, and 82% after 40 (at $200/mo, 7%). Compounding does the heavy lifting only over decades.

What's the difference between APR and APY?

APR ignores in-year compounding; APY includes it. APY is the honest comparison number for savings accounts.

Does it account for taxes or fees?

No. A simple workaround is to subtract your expected fee percentage from the rate you enter, and to remember that gains outside tax-sheltered accounts are usually taxable.

Contributions at start or end of month?

End of month, after growth is applied — the conservative convention. Start-of-month contributions would give a slightly higher figure.

Higher rate or longer time — which matters more?

Both, but you control time and fees, not market returns. Modelling an optimistic rate is how plans quietly fail.

Can I use this for a high-yield savings account?

Yes — enter its APY. Just remember savings rates are variable, so long projections at today's rate are optimistic.

Is my data private?

Yes. Everything runs as client-side JavaScript in your browser; nothing is uploaded.

Sources and further reading

SEC Investor.gov — compound interest — the US regulator's own calculator and explanation of compounding.
Bureau of Labor Statistics — Consumer Price Index — the official US measure of inflation, for choosing a realistic inflation assumption.
Federal Reserve — interest rate policy and data underlying savings account yields.
FDIC deposit insurance — coverage limits that apply to savings accounts holding this money.
Calculation logic is the open JavaScript source behind the calculator; the loop is reproduced under how this calculator does the math.

Related calculators

Estimates only — this is educational information, not investment advice. Real returns vary, are not guaranteed, and can be negative. Results are shown in nominal dollars before taxes, fees and inflation. Verify important decisions with a qualified professional.