How this calculator works
Compound interest adds earned interest to the balance, so future interest is earned on a growing amount.
Compounding frequency matters slightly: daily compounding at 5% equals about 5.13% a year. The calculator converts the rate to an equivalent monthly rate to match monthly contributions.
Contributions are added at the end of each month.
For investments, the rate is an assumption, not a guarantee. Returns vary from year to year.
Worked example
$10,000 plus $300 a month at 5% for 20 years
- Total contributed: $82,000.
- Value after 20 years: about $150,400.
- Interest earned: about $68,400, nearly half the final balance.
Questions people ask
What is the rule of 72?
Divide 72 by the annual rate to estimate how many years money takes to double. At 6%, it is about 12 years.
Is compound interest better than simple interest?
For savers, yes: compound interest grows faster because interest earns interest. For borrowers it is the opposite.
How often do savings accounts compound?
Most compound daily and pay monthly. The APY figure already reflects compounding, so compare accounts by APY.
Last reviewed October 2, 2026