🧮 Financial Tool
Compound Interest Calculator
See how your money grows over time with compound interest, monthly contributions, and multiple solve modes.
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Final Amount
$300,851
Total Contributed
$130,000
Interest Earned
$170,851
131.4% on contributions
Growth Projection
Your calculation step by step
A = P × (1 + r/n)n×t + PMT × [(1+r/n)^(n×t) - 1] / (r/n)
P = $10,000
r = 7%
n = 12
t = 20 years
PMT = $500/mo
A = $300,851
| Year | Balance | Contributed | Interest |
|---|---|---|---|
| 1 | $16,919 | $16,000 | $919 |
| 2 | $24,339 | $22,000 | $2,339 |
| 3 | $32,294 | $28,000 | $4,294 |
| 4 | $40,825 | $34,000 | $6,825 |
| 5 | $49,973 | $40,000 | $9,973 |
| 6 | $59,782 | $46,000 | $13,782 |
| 7 | $70,299 | $52,000 | $18,299 |
| 8 | $81,578 | $58,000 | $23,578 |
| 9 | $93,671 | $64,000 | $29,671 |
| 10 | $106,639 | $70,000 | $36,639 |
| 11 | $120,544 | $76,000 | $44,544 |
| 12 | $135,455 | $82,000 | $53,455 |
| 13 | $151,443 | $88,000 | $63,443 |
| 14 | $168,587 | $94,000 | $74,587 |
| 15 | $186,971 | $100,000 | $86,971 |
| 16 | $206,683 | $106,000 | $100,683 |
| 17 | $227,820 | $112,000 | $115,820 |
| 18 | $250,486 | $118,000 | $132,486 |
| 19 | $274,790 | $124,000 | $150,790 |
| 20 | $300,851 | $130,000 | $170,851 |
Methodology
A = P × (1 + r/n)^(n×t) + PMT × [(1+r/n)^(n×t) - 1] / (r/n)
P = initial principal, r = annual rate, n = compounds per year, t = years, PMT = periodic contribution. Compound interest reinvests gains, creating exponential growth over time.
Want to test with real ETF data?
Open Backtester →This calculator is for educational purposes only. Actual returns vary; past performance does not guarantee future results.
💬 Frequently Asked Questions
Compound interest is when interest is calculated on both the initial principal and the accumulated interest from previous periods. This creates exponential growth over time. A $10,000 investment at 8% grows to $21,589 in 10 years and $46,610 in 20 years — without adding a single dollar.
At an average annual return of 8%, investing $500/month for 20 years gives you approximately $294,000 — of which $120,000 is your contributions and $174,000 is growth from compound interest. The earlier you start, the more powerful the effect.
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus all accumulated interest. Over long periods, compound interest dramatically outperforms simple interest. For example, $10,000 at 8% for 30 years: simple interest yields $34,000, but compound interest yields $100,627.