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UniversalCalc

Compound interest calculator

Enter what you've saved, what you add each month and the return you expect, and see what it turns into year by year.

Updated

$

What you start with. Can be 0.

$
%

Broad stock market indexes have historically averaged 7–10% a year.

years
%

To see the result in today's dollars. The Fed targets 2%.

Past returns don't guarantee future returns. This projection assumes a constant rate, which no real market delivers: it's meant to show how compounding works, not to predict what you'll earn.

What you'll have

Enter an initial deposit or a contribution to see the result.

What this tool calculates

Enter what you’re starting with, what you add and how often, the return you expect and how many years you’ll stay invested. The calculator shows how much you’ll have at the end, how much of it you put in yourself and how much the interest earned, plus what it’s worth in today’s dollars after inflation.

The table below the result shows every year. Watch the interest column: at first it’s tiny next to your contributions, and at some point it overtakes them. That crossover is when your money starts working harder than you do.

The formula

It’s two pieces added together. The starting amount, which grows on its own:

FV = P × (1 + r)^n

And the regular contributions, which form an annuity:

FV = PMT × ((1 + r)^n − 1) ÷ r

  • P: your initial deposit.
  • PMT: what you add each period.
  • r: the rate per period (the annual rate divided by 12 if it compounds monthly).
  • n: the total number of periods.

The key is n: it’s in the exponent, so time doesn’t add up, it multiplies.

An example that speaks for itself

$200 a month at 7% a year, starting from zero:

YearsContributedTotalOf which, interest
10$24,000$34,617$10,617
20$48,000$104,185$56,185
30$72,000$243,994$171,994
40$96,000$524,963$428,963

After 10 years, interest is 31% of the total. After 40 years, it’s 82%. And from year 30 to year 40 the balance more than doubles while you add only $24,000 more: that’s compounding doing the heavy lifting.

Compare it with a single $10,000 deposit left alone for 30 years at 7%: it grows to $81,165. Regular contributions beat a lump sum you never add to, even a generous one.

Why starting early always wins

The classic example, at 7% a year:

  • Emma invests $100 a month from age 25 to 35 and then never adds another dollar. Total contributed: $12,000.
  • Jake starts at 35 and invests $100 a month until 65. Total contributed: $36,000.

At 65, Emma has $140,484 and Jake has $121,997. Emma wins having put in a third of the money, because her first ten years of contributions had thirty more years to compound. No investment strategy makes up for starting ten years late.

Don’t forget inflation

The $243,994 from the 30-year example is a real number, but it won’t buy what $243,994 buys today. At 2% inflation a year it’s worth about $134,702 in today’s dollars. The calculator shows both figures; plan with the second one.

What this calculator doesn’t tell you

  1. Returns aren’t steady. A stock index can gain 25% one year and lose 35% the next. The 7% is a long-run average, not a monthly paycheck.
  2. Taxes. Gains in a taxable account are taxed when you sell; a 401(k) or an IRA changes that math in your favor.
  3. Fees. A 1% annual fee sounds small, but over 30 years it can eat a quarter of your final balance. Subtract it from the return you enter.
  4. Sequence matters. A bad year early on hurts much less than a bad year right before you need the money.

Use this tool to understand the mechanics and compare scenarios, not as a promise of a future balance. If you’re deciding between investing and paying down a loan, the mortgage calculator shows what extra payments save.

Frequently asked questions

What exactly is compound interest?

It's interest earned on your interest. With simple interest, $1,000 at 7% earns $70 every year, always the same. With compound interest, in year two those $70 earn interest too, so you make $74.90; in year three, $80.14. It looks small at first, but after 30 years, compounded once a year, that $1,000 grows to $7,612 instead of $3,100.

What is the compound interest formula?

For a lump sum: FV = P × (1 + r)^n, where P is the starting amount, r the interest rate per period and n the number of periods. If you also add a fixed amount every period, you add PMT × ((1 + r)^n − 1) ÷ r. This calculator combines both and compounds monthly.

What is the rule of 72?

A shortcut for how long it takes your money to double: divide 72 by the annual return. At 6% it takes 12 years, at 8% nine years, at 12% six years. It's an approximation, but a very good one between 4% and 12%, and you can do it in your head.

What rate of return should I use?

It depends on where the money is. A high-yield savings account pays a few percent. A broad stock index fund has historically returned around 10% a year before inflation and about 7% after, but with years of −30% or worse along the way. Use a number you can defend, and try a pessimistic scenario too.

Why does the result include inflation?

Because $100,000 in 30 years won't buy what it buys today. At 2% inflation a year, it would be worth about $55,000 in today's money. The inflation field converts the result into today's dollars, which is the number you can actually reason with.

Is it better to start early or to invest more?

Start early, by a wide margin. Someone who invests $100 a month from 25 to 35 and then stops ends up at 65 with more money, at 7%, than someone who starts at 35 and invests $100 a month for thirty straight years. Time is the most powerful variable in the formula because it sits in the exponent.

Does this account for taxes and fees?

No. In a regular brokerage account, gains are taxed when you sell: long-term capital gains at 0%, 15% or 20% federally depending on your income. Accounts like a 401(k) or an IRA defer or avoid that tax. Fund fees come out every year; a simple way to include them is to subtract the expense ratio from the return you enter.

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