What is compound interest?
Compound interest means you earn interest not only on your original deposit, but also on the interest already added. Each period's growth is bigger than the last, so the balance snowballs — which is why starting early matters more than almost anything else.
Future value = Principal × (1 + rate)time + contributions
Adding a little every month
The single biggest lever most people have is a small, steady monthly deposit. Enter one in the monthly contribution field and watch the future value jump. $200 a month at 6% for 30 years becomes roughly $200,000 — and only about $72,000 of that is money you put in. The rest is interest on interest.
The rule of 72
Want a quick estimate without a calculator? Divide 72 by your interest rate to see roughly how many years it takes your money to double. At 6% that's about 12 years; at 8%, about 9. It's rough, but close enough to sanity-check any savings plan in your head.
How often interest compounds
This calculator compounds monthly, which matches how most savings accounts and many investments actually work. More frequent compounding gives a slightly higher result than once-a-year compounding, because interest starts earning its own interest sooner.
Remember inflation
A balance that looks large in 30 years won't buy 30 years' worth more — prices rise too. As a rough guide, subtract the inflation rate (often 2–3%) from your interest rate to picture growth in today's money. It doesn't change the plan, but it keeps expectations honest.
Tools that pair with this one
- Discount Calculator — money you save on a purchase is money you could put to work here
- Loan Calculator — the same compounding works against you on borrowed money — see what a loan really costs
Compounds monthly and assumes a fixed rate with no withdrawals. Real savings and investment returns vary and are not guaranteed. Not financial advice.