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VELNARO

Compound Interest Calculator

Compound interest is the reason long-term investing works. Enter a starting amount, regular contributions, a rate and a period to see the final balance and how much of it is growth.

Final balance

$170,619.05

Total contributed

$70,000.00

Total interest earned

$100,619.05

Growth multiple

2.44×

Effective annual rate

7.23%

How this was worked out

  1. Step 1Rate per period = 7% ÷ 12 = 0.5833%
  2. Step 2Periods = 20 × 12 = 240
  3. Step 3Growth on the starting amount: $40,387.39
  4. Step 4Growth on contributions: $130,231.66

Returns are assumed constant and reinvested. Real investments fluctuate, and tax and fees reduce actual returns.

Formula

A = P(1 + r/n)^(nt) + C × ((1 + r/n)^(nt) − 1) ÷ (r/n)

How it works

  1. 1Compound interest means you earn interest on previously earned interest, not just the original amount.
  2. 2The more often interest is compounded, the faster the balance grows — monthly beats annual compounding.
  3. 3Time is the most powerful variable: the same rate over 30 years produces far more than over 10 years.

Example

Input

$10,000 + $250/month at 7% for 20 years

Result

≈ $170,000, of which ≈ $100,000 is interest

Frequently asked questions

Simple interest pays only on the original principal. Compound interest also pays on accumulated interest, so growth accelerates over time.

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