Compound Interest Calculator
See how your money can grow over time with the power of compound interest. Adjust the inputs below and watch your future wealth unfold.
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Start Your Budget — It's FreeWhat is compound interest?
Compound interest is the interest earned on both your initial principal and the accumulated interest from previous periods. Unlike simple interest — which is only calculated on the principal — compound interest causes your money to grow exponentially over time. It is widely considered the most powerful force in personal finance and long-term wealth building.
How does compound interest work?
The compound interest formula is: A = P(1 + r/n)^(nt), where A is the future value, P is the principal, r is the annual interest rate, n is the number of times interest compounds per year, and t is the number of years. Each compounding period, the interest earned is added to the principal, so in the next period you earn interest on a larger balance.
Why should I start investing early?
The earlier you start investing, the more time your money has to compound. Even small monthly contributions — like $100 per month — can grow into significant wealth over decades. For example, $100/month at 8% annual return grows to over $150,000 in 30 years, even though you only contributed $36,000. This calculator helps you visualize exactly how much your investments could be worth.
How much should I invest each month?
Financial experts recommend investing at least 20% of your after-tax income, following the 50/30/20 budgeting rule. However, any amount is better than nothing — the key is consistency and starting as early as possible. Use the calculator above to experiment with different monthly contribution amounts and see how they affect your long-term wealth.