What is a Compound Interest Calculator?
A Compound Interest Calculator helps you estimate how much your money will grow over time when you reinvest your interest. Unlike simple interest, which only applies to your initial balance, compound interest means you earn “interest on interest.” This is what makes long-term investing so powerful.
For example, if you invest $1,000 at 7% annual growth and let it compound for 20 years, your money could grow to almost $4,000 — even without adding monthly contributions. Add consistent deposits, and the growth becomes exponential.
Why Use a Compound Interest Calculator?
🔎 Adjust for inflation to see your money’s real purchasing power in today’s dollars.
📈 Plan for long-term goals like retirement, a house down payment, or your child’s education.
💰 See the power of monthly contributions — even $100/month can add up to thousands over time.
🕒 Understand the value of time — the earlier you start, the more compounding works in your favor.
How to Use This Calculator
- Enter your starting amount (the money you already have).
- Add your monthly contribution (optional, can be $0).
- Enter your expected annual interest rate (e.g., 7% for stock market average).
- Enter the number of years you’ll let it grow.
- (Optional) Add inflation to see today’s equivalent value.
- Click Calculate to see your future value, your growth from compounding, and your inflation-adjusted amount.
FAQs - Why is compound interest powerful?
Because it grows on itself. The earlier you start investing or saving, the more time your money has to multiply. - What is a realistic interest rate to use?
Historically, the US stock market has returned about 7% annually (after inflation). For safer investments like bonds or savings accounts, use 2–4%. - How much should I contribute monthly?
It depends on your goals, but even small amounts make a difference. Try testing different contributions in the calculator to see how your future wealth changes.