$25,000 at 7% over 10 years
Here’s how $25,000 at 7% grows over 10 years with monthly compounding.
Different numbers? Use the full compound interest calculator above.
About this compound interest calculator
Compound interest is what happens when the interest your money earns starts earning interest of its own. This calculator uses the standard compound interest formula, A = P(1 + r/n)^(nt), where P is your starting principal, r is the annual interest rate, n is how many times per year interest compounds, and t is the number of years you let it grow. The result is your future balance, A.
The compounding frequency you choose matters more than most people expect. Interest that compounds daily grows slightly faster than interest that compounds monthly, which grows faster than interest that compounds annually — because interest is being calculated and added to the balance more often, so future interest is calculated on a slightly larger base sooner. The difference is usually small at everyday rates, but it grows with higher rates and longer time horizons.
If you add a monthly contribution, the calculator layers a second calculation on top of the lump-sum formula: the future value of a series of equal monthly deposits, using the standard annuity formula with a monthly rate of r/12. This estimates how a regular savings habit compounds alongside your initial deposit, which is usually the biggest driver of long-term growth for most savers.
This tool is meant for planning and education, not a guarantee. Real accounts — savings accounts, CDs, and investment accounts alike — rarely earn a perfectly steady rate every period; actual returns fluctuate, and investment returns in particular are never guaranteed. Interest income may also be subject to taxes depending on the account type and your jurisdiction, which this calculator does not account for.
The results shown here are estimates for informational purposes only and are not financial advice. Actual account terms, compounding rules, fees, and interest rates vary by institution and product, so always confirm the specifics with your bank or financial advisor before making a decision based on these numbers.
Compound interest questions
How the future balance and interest earned are calculated.
What is the compound interest formula?
A = P(1 + r/n)^(nt), where A is the future balance, P is the principal, r is the annual interest rate as a decimal, n is the number of times interest compounds per year, and t is the number of years.
What's the difference between compound interest and simple interest?
Simple interest is calculated only on your original principal, so it grows at the same dollar amount every period. Compound interest is calculated on your principal plus any interest already earned, so it grows faster over time as your balance builds on itself.
Does compounding frequency really make a big difference?
It makes a smaller difference than the interest rate or time horizon, but daily compounding will always produce a slightly higher balance than monthly, which produces a slightly higher balance than annual compounding, at the same stated rate.
How are monthly contributions calculated?
This calculator adds the future value of a series of equal monthly deposits (an annuity) to the compounded value of your initial principal, using a monthly rate of the annual rate divided by 12.
Why does time matter so much for compound interest?
Because each period's interest is calculated on a growing balance, the effect compounds — a longer time horizon gives your balance more periods to grow on top of itself, which is why starting to save early tends to matter more than the exact rate you earn.
Is the interest rate I enter guaranteed?
No. This calculator assumes a constant annual rate for the entire period, which is a simplification. Real savings and investment returns can vary year to year, and investment returns in particular are never guaranteed.
Does this calculator account for taxes or fees?
No. The results are gross figures before any taxes on interest income or account fees, which vary by account type, institution, and jurisdiction.
Is this financial advice?
No. This calculator provides estimates for informational and educational purposes only. It is not financial advice, and actual account terms and returns depend on your specific bank, investment product, and circumstances.