Compound Interest Calculator
Calculate investment growth with compound interest: lump sum or recurring contributions, multiple compounding frequencies, inflation adjustment, effective APY, growth chart, and year-by-year breakdown.
| Year | Contributions | Interest | Balance | Real (infl-adj) |
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Formula reference
About this tool
Compound interest is interest earned on both the principal and the accumulated interest from previous periods — the "interest on interest" effect that Albert Einstein is said to have called the eighth wonder of the world. Over long horizons it is the single biggest driver of investment growth, which is why starting early matters more than starting big.
Example: a $10,000 lump sum at 7% annual return, compounded monthly for 30 years, grows to about $81,000. Add a $200 monthly contribution over the same period and the final balance jumps to roughly $285,000.
This calculator handles both lump-sum and recurring-contribution scenarios, lets you pick the compounding frequency (monthly is standard for most investments), applies an inflation adjustment so you see real purchasing power, and reports the effective APY so you can compare accounts that compound at different intervals.
FAQ
What is the difference between APR and APY? ›
APR (annual percentage rate) is the simple yearly rate without compounding. APY (annual percentage yield) is what you actually earn after compounding is applied. An account with 6% APR compounded monthly has an APY of about 6.17%.
Which compounding frequency should I pick? ›
Most savings accounts and index funds compound monthly. Daily compounding gives a tiny edge over monthly at the same nominal rate but the difference over a year is usually under 0.1%. Use whatever matches your actual account.
Why does the inflation-adjusted number look lower? ›
Inflation erodes purchasing power over time. If inflation averages 3% per year, $100,000 in 20 years buys what $55,000 buys today. The inflation-adjusted figure shows the real value of your money in today's terms.
Does this account for taxes or fees? ›
No. The calculator shows gross growth before income tax and fund expense ratios. A typical index fund charges 0.03%–0.20% per year; tax treatment depends on your jurisdiction and account type.