Compound Interest

Projects how savings or investments grow with compound returns and optional recurring contributions.

The future value is an estimate based on your assumed return rate. Small changes in return or contribution rate have a large effect over long periods because of compounding.

1. Enter starting balance and optional monthly contribution.
2. Set expected annual return, time horizon, and compounding frequency.
3. Review projected future value.

Compound interest

Starting balance: FV = P(1 + r/n)^(nt). Monthly contributions (always compounded monthly): FV_contrib = PMT × [((1 + r/12)^(12t) − 1) / (r/12)]. Total = both parts added.

Source. Investor.gov defines compound interest as interest paid on principal and on accumulated interest. On this page the starting balance grows by (1 + annual rate ÷ compounding frequency) raised to frequency times years. Monthly contributions grow monthly: payment times ((1 + annual rate ÷ 12) raised to the number of months, minus 1) divided by (annual rate ÷ 12). Investor.gov, compound interest.

Updated November 1, 2026

$10,000 at 7% with $200/month for 10 years grows to roughly $54,700 (balance compounds at your chosen frequency; contributions compound monthly).

• Compounding frequency applies to the starting balance only; monthly contributions always compound monthly.
• Past performance does not guarantee future returns.
• Taxes and investment fees are not included.

How often should interest compound for savings?

More frequent compounding (daily vs. annually) slightly increases growth at the same stated rate. Use the frequency that matches your account.

Is 7% a realistic return assumption?

It depends on the investment. Broad stock-market historical averages are often cited near 7–10% before inflation, but actual results vary year to year.