Compound interest is the reason starting early beats saving more later: every period, your returns are added to the balance and start earning returns of their own. The difference between simple and compound growth looks small in year one and enormous in year twenty, which is why this calculator shows the full year-by-year breakdown — contributions, interest earned and balance — instead of just a final number. Enter your starting amount, monthly contribution, expected annual return and time horizon, and pick how often interest compounds. It is the same math behind savings accounts, fixed deposits, mutual fund projections and retirement planning, so it works as a reality check for almost any long-term goal.
The formula
Example
$10,000 start, $300/month, 8% annual return, 20 years, monthly compounding. You contribute $82,000 in total and end with about $176,000 — more than half of it pure growth. Stretch it to 30 years and the same contributions reach roughly $417,000.
Compounding frequency
Daily compounding beats monthly, which beats annual — but the gap is smaller than most people expect. At 8%, daily vs annual compounding differs by less than 0.4% of the final amount. The contribution amount and the time horizon move the needle far more than the frequency does.
Frequently asked questions
What is compound interest?
Interest calculated on the initial amount plus all previously earned interest. Each period the balance grows, so the next period's interest is larger — growth accelerates over time.
What is a realistic return to assume?
For long-term stock market projections, 7–10% nominal (before inflation) is the commonly used range based on historical averages. For savings accounts or fixed deposits, use the actual quoted rate.
How does the rule of 72 work?
Divide 72 by the annual rate to estimate doubling time. At 8%, money doubles roughly every 9 years. It is an approximation of the compound formula above.
Is this before or after inflation?
The calculator projects nominal growth. To think in today's money, subtract expected inflation (often ~3%) from your assumed return.