Enter a starting amount, an optional monthly contribution, an annual return and a duration to see your final balance and how much of it is pure compound growth.
How to use this calculator
Enter your initial deposit — it can be 0 if you are starting from scratch.
Set a monthly contribution. Consistency matters more than size: small regular deposits beat rare large ones.
Choose a realistic annual return. 5–8% is a common long-term planning range for diversified stock investments; savings accounts earn much less.
Pick the duration in years and read the final balance, total contributions and interest earned.
Watch the chart: the widening gap between the balance line and the contributions line is your compound growth.
Formula & method
How compound growth is calculated
Balance ×= (1 + r/12) each month, then + monthly contribution
r = annual return as a decimal, compounded monthly. Interest is earned on both your contributions and previously earned interest — that reinvestment is what makes growth exponential rather than linear.
Example
$10,000 initial + $200/month at 6% for 20 years grows to about $125,487 — you contributed $58,000 and compounding added roughly $67,487.
Key insights
Starting 10 years earlier usually beats doubling your contribution later — early deposits compound for the longest.
With the default inputs ($10,000 + $200/month at 6%), the interest earned each year overtakes your own yearly contributions around year 8.
Over 20 years at 6%, more than half of the final balance is compound growth rather than money you deposited.
Small rate differences compound hard: 6% vs 7% over 20 years on the default inputs is roughly a $19,000 difference.
Fees act like negative returns: a 1% annual fee costs about the same as dropping your return by one full point.
How to interpret your result
Balance vs contributions
The gap between the final balance and total contributions is your compound growth. If it looks small, the duration is short or the rate low — time is the strongest lever.
Nominal, not inflation-adjusted
Results are in future dollars. At around 2.5% inflation, divide a 20-year result by roughly 1.6 to estimate today's purchasing power.
Returns are not smooth
Markets do not deliver an even 6% every year — real sequences vary widely. Treat the output as a planning estimate, never a guarantee.
Taxes matter
Interest and investment gains may be taxed unless held in tax-advantaged accounts, so taxable accounts grow more slowly than shown here.
Frequently asked questions
What return rate should I use?
For long-term, diversified stock investments, 5–8% per year (after inflation, before taxes) is a common planning range. Savings accounts are much lower. Past performance never guarantees future returns.
Why does starting early matter so much?
Each year adds a compounding cycle. $200/month for 30 years at 6% beats $400/month for 15 years — even though the total contributed is the same — because early dollars compound the longest.
Is interest compounded monthly or yearly here?
Monthly, which matches how most savings accounts and index-fund growth models work. Yearly compounding at the same nominal rate would give a slightly lower balance.
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