Compound interest calculator
See how your money grows over time with monthly contributions and an evolution chart.
Estimate with a constant rate; taxes and inflation are not included.
How the calculation works
Compound interest is "interest on interest": each period, the return is calculated on the full accumulated balance, not just the initial amount — which is why growth is exponential: slow at first, then faster and faster.
The formula with monthly contributions is:
Amount = P·(1+i)^n + PMT·[((1+i)^n − 1) / i]
P= initial amountPMT= monthly contributioni= rate per period (decimal)n= number of periods
Growth in practice
Using the calculator's default example ($1,000 initial + $300/month at 0.8%/month):
| Time | Invested | Balance | Accumulated interest |
|---|---|---|---|
| 1 year | $4,600 | $4,863 | $263 |
| 2 years | $8,200 | $9,114 | $914 |
| 3 years | $11,800 | $13,790 | $1,990 |
| 5 years | $19,000 | $24,600 | $5,600 |
| 10 years | $37,000 | $62,667 | $25,667 |
Notice the pattern: the first 12 months add $263 of interest; years 5 through 10 add over $20,000 — time matters more than the rate.
Yearly or monthly rate?
This calculator uses a monthly rate. If you have a yearly rate, convert it with compound equivalence: i_monthly = (1 + i_yearly)^(1/12) − 1. E.g., 10%/yr = 0.797%/mo (not 0.833%). Our interest rate converter does this for you.
What the simulation leaves out
Taxes on gains, management fees and inflation. To think in purchasing power, use a real rate (net of inflation) — the result then comes out in "today's money".
Examples
- $1,000 initial + $300/mo at 0.8%/mo for 60 months ≈ $24,600 ($5,600 from interest alone).
- No initial amount: $500/mo at 0.8%/mo for 10 years ≈ $96,000, with ~$36,000 from interest.
- Doubling without contributions: at 0.8%/mo, $10,000 becomes $20,000 in ~87 months (rule of 72: 72 ÷ 0.8 ≈ 90).
Frequently asked questions
Simple vs compound interest?
Simple interest always applies to the initial amount. Compound interest applies to the accumulated balance, producing exponential growth.
How to convert a yearly rate to monthly?
Use the equivalence: i_monthly = (1 + i_yearly)^(1/12) − 1. Dividing by 12 is not accurate.
What helps more: bigger contributions or a higher rate?
Short term, contributions dominate. Long term (10+ years), rate and time take over, because interest compounds on an ever-larger balance.
How long until my money doubles?
Shortcut: the rule of 72 — divide 72 by the rate. At 0.8%/month, it doubles in ~90 months (7.5 years). We have a calculator just for that.
Does the calculator include taxes?
No. Where gains are taxed, tax reduces the final result at withdrawal. The simulation shows gross values.
How do I convert a yearly rate into a monthly one?
Do not divide by 12. The correct conversion is (1 + annual rate)^(1/12) − 1. For 10% a year that is 0.7974% a month, not 0.8333%.
How long does it take to double my money?
Use the rule of 72: divide 72 by the annual rate. At 10% a year, about 7.2 years; at 6%, twelve years. It doubles as a scam filter.
How much tax do I pay on the return?
On taxable fixed income, tax applies only to the gain and falls with time: 22.5% up to 180 days, 20% to 360, 17.5% to 720 and 15% beyond. Some instruments are tax-free for individuals.
Should I invest or pay off debt first?
If the debt rate is higher than your expected return — and on credit cards it is far higher — paying it off is the best possible return: guaranteed and tax-free.
Why does the real result fall short of the simulation?
Almost always three reasons: tax on gains, management fees and inflation. Use a real rate — and remember real gain is a division: 10% with 5% inflation is 4.76%, not 5%.
Sources and references
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Updated on July 2, 2026 · by Rafael Rossi · Methodology & sources