How does compound interest work?

Each period’s return is calculated on the balance including previously earned returns, so growth accelerates over time. The formula here compounds monthly and adds your contribution at the end of each month.

What rate of return should I assume?

Any rate you enter is an assumption, not a forecast. Real returns vary year to year and can be negative. Because the projection compounds, small changes in the rate produce large changes at long horizons — try a range rather than a single figure.

Does this account for inflation, tax or fees?

No. The result is a nominal projection before inflation, taxes and any platform or fund fees, each of which reduces what you actually keep. Treat it as arithmetic on your inputs rather than an expected outcome.

Compound Interest Calculator

Project how a starting amount plus regular contributions could grow, and see how much of the result is your own money versus compounding. Returns are an assumption you choose — not a forecast.

Starting amount$Monthly contribution$Annual return%An assumption. Real returns vary and can be negative.YearsUp to 60.

Projected balance: $300,851
You contributed: $130,000
Growth from compounding: $170,851

Balance by year — the shaded part is what you put in

Year 1Year 20

How this is calculated

balance = start x (1 + r)^n + PMT x [((1 + r)^n - 1) / r]

r: annual return / 12 (this tool compounds monthly)
n: number of months
PMT: contribution added at the end of each month

Worked example

$10,000 plus $500 a month at 7% for 20 years reaches about $301,000. Of that, $130,000 is money you paid in and roughly $171,000 is compounding — the split matters more than the headline.

Common questions

How does compound interest work?: Each period’s return is calculated on the balance including previously earned returns, so growth accelerates over time. The formula here compounds monthly and adds your contribution at the end of each month.
What rate of return should I assume?: Any rate you enter is an assumption, not a forecast. Real returns vary year to year and can be negative. Because the projection compounds, small changes in the rate produce large changes at long horizons — try a range rather than a single figure.
Does this account for inflation, tax or fees?: No. The result is a nominal projection before inflation, taxes and any platform or fund fees, each of which reduces what you actually keep. Treat it as arithmetic on your inputs rather than an expected outcome.

Other free tools

Dividend Income Calculator Dollar-Cost Averaging Calculator Expense Ratio Calculator

Free to start

Take the research further with Valarn

These calculators work with the numbers you already have. Valarn goes and finds them — running a full research pass on a stock and showing its whole argument, so you can reach your own view.

A desk of specialist AI analysts on any ticker
The full reasoning, bull and bear, not just a score
Every claim linked back to its source

Join free See pricingFree tier: 1 report a month, no credit card.

Already have an account? Log in

This tool performs arithmetic on the figures you enter. It is for informational and educational purposes only, is not investment, tax or financial advice, and is not a recommendation to buy, sell, or hold any security. Projections are assumptions, not forecasts. Always do your own due diligence.

All free tools