Compound Interest Calculator
See how your investment grows over time with compound interest and regular contributions.
Final Balance
$1,290,611.37
22.25× growth over 20 years
Total Invested
$58,000.00
Interest Earned
$1,232,611.37
How Compound Interest Works
Compound interest is widely considered the most powerful force in personal finance. Unlike simple interest, which only calculates returns on your initial principal, compound interest calculates returns on your principal plus all previously earned interest. This creates exponential — not linear — growth over time.
The formula is: A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate, n is the compounding frequency per year, and t is the time in years. With monthly contributions, each contribution also begins earning compound interest from the month it's added, dramatically amplifying the final balance.
The stacked area chart above shows the split between your total invested amount and the interest earned on top of it. Over long time horizons, the interest component typically dwarfs the principal — this is the compounding effect at work. For a 30-year investment at 7%, roughly 75% of the final balance comes from interest earned, not from dollars you contributed.
Time is the most important variable. Starting 10 years earlier can more than double your final balance, even if you invest the same total amount. A 25-year-old investing $200/month at 7% until age 65 accumulates roughly $525,000. A 35-year-old making the same monthly investment accumulates only about $243,000 — less than half, despite only a 10-year head start difference.