Compound Interest Calculator
See how a deposit grows over time with periodic compounding.
Result
$10,000 grows to $145,180 after 20 years at 7% (compounded monthly).
- Total contributed
- $58,000
- Total interest
- $87,180
- Final balance
- $145,180
Inputs
Formula
A = P(1 + r/n)^(nt) + contributions compounded
Related calculators
Calcxo gives you the answer plus the reasoning behind it.
Quick answer
Compound Interest Calculator: in one paragraph
Compound interest is interest that earns interest. Each period, the interest you earned gets added to the balance, so the next period's interest is calculated on a slightly bigger number. Over years, that snowball is what builds real wealth.
What this calculator does
Enter a starting balance, a rate, a time horizon, and (optionally) regular contributions. The calculator projects what your money is likely to be worth — and shows how much of that came from your contributions versus from compounding.
Why people use it
- See concretely why starting early matters more than starting big.
- Compare scenarios: extra $50 a month, one extra year, half a percent more.
- Plan toward a savings or retirement target with a real number.
- Stress-test what a market downturn might do to a long-term plan.
$5,000 invested for 20 years at 7%
A concrete walkthrough you can follow line by line.
You invest $5,000 once and let it sit for 20 years at a 7% annual return, compounded yearly.
1. Use the compound formula
A = P × (1 + r)^t
2. Plug in the numbers
A = 5000 × (1.07)^20
3. Evaluate
(1.07)^20 ≈ 3.8697 → 5000 × 3.8697 ≈ 19,348
Result
About $19,348 — nearly four times what you started with, with no extra contributions.
When to use this calculator
- Long-term savings, retirement projections, or investment what-ifs.
- Comparing two savings products with different compounding frequencies.
- Avoid for short-term loans where amortization is more useful.
Common mistakes
- Confusing nominal and effective rates when compounding more often than yearly.
- Forgetting that inflation eats into the headline return.
- Modeling a guaranteed return when the underlying investment isn't guaranteed.
- Skipping fees — even 1% a year compounds against you the same way returns compound for you.
Quick questions
What's the formula?+
A = P × (1 + r/n)^(n·t), where P is your starting amount, r is the annual rate, n is the number of compounding periods per year, and t is years.
How is it different from simple interest?+
Simple interest is calculated only on the original amount. Compound interest is calculated on the original amount plus all the interest you've already earned.
Learn more
Deeper reads from the Calcxo learn library.