Calculate how your money grows over time with compound interest. Add monthly contributions, choose compounding frequency, and see the full year-by-year growth table.
| Year | Balance | Principal+Contrib | Interest | Return |
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Compound interest is one of the most powerful concepts in personal finance. Unlike simple interest — which is calculated only on the principal — compound interest is calculated on the principal plus all previously accumulated interest. This creates an exponential growth curve rather than a linear one.
For a lump sum with no contributions: FV = P × (1 + r/n)^(n×t) where P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the time in years.
With regular monthly contributions (PMT): FV = P×(1+r/n)^(nt) + PMT × [(1+r/n)^(nt) − 1] / (r/n)
More frequent compounding produces a slightly higher return. At 8% annual rate, $10,000 over 10 years becomes: $21,589 (annually), $21,911 (monthly), $21,994 (daily). The difference is smaller at moderate rates but becomes meaningful at higher rates or over very long periods.
A quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 8% per year, your money doubles roughly every 72 ÷ 8 = 9 years.
Even modest monthly contributions have a dramatic effect over decades. Adding $200/month at 8% over 20 years turns $10,000 into roughly $126,000 — versus only $46,600 without contributions. This demonstrates the power of consistent investing over time.