COMPOUND INTEREST CALCULATOR
The default 7% annual return is a common assumption for diversified stock-market index investing over multi-decade periods. Real returns vary year to year and are not guaranteed. This is a planning tool, not investment advice.
Updated May 2026 · Built by Lukáš, an architect in Prague.
Formula, assumptions, rounding & limitations
Formula
monthly rate = annual rate ÷ 12 ÷ 100- For each month:
balance = balance × (1 + monthly rate) + contribution total contributed = starting balance + (monthly contribution × months)interest earned = future value − total contributed
Assumptions
- The annual rate you enter is fixed for the whole period.
- Monthly contribution is constant and applied at the end of each month.
- Compounding is monthly — neither daily, quarterly, nor annual.
- Both decimal comma (7,0) and decimal point (7.0) are accepted.
Rounding
- Future value, total contributed, and interest earned are rounded to the nearest dollar for display.
Limitations
- Returns are not guaranteed. Real-world rates vary year to year and can be negative.
- Figures are nominal — inflation is not modelled. Actual purchasing power will be lower.
- Taxes (capital gains, dividends, withdrawal taxes), account fees, fund expense ratios, and trading costs are not modelled.
- Lump-sum and irregular contributions are not modelled.
- This is a planning estimate, not investment advice or a guarantee of future results.
Does starting earlier really matter that much?
Yes — dramatically. $200/month from age 25 to 65 at 7% grows to about $525,000. The same $200/month from age 35 to 65 grows to about $245,000. You contributed $24,000 less in the first scenario but ended with more than twice as much. Time is the biggest variable.
What return rate should I use?
For long-term diversified stock investing, 6–8% is a common planning assumption (after inflation, closer to 4–5%). For bonds, 3–4%. For a savings account, whatever your bank pays. Always run the calculator at multiple rates to see the range.
Does this account for inflation?
No, it shows nominal future dollars. To estimate purchasing power, subtract roughly 2–3% from your APR before calculating. A 7% nominal return with 3% inflation is about 4% real.
What if I contribute irregularly?
This tool assumes a constant monthly contribution. For lump sums or irregular schedules, the math is more complex — you’d need a spreadsheet or a financial planner. For consistent saving habits, this is accurate enough.