Compound interest is interest on interest: each period's interest joins your balance and starts earning too. The calculator adds your monthly deposits and compounds at the frequency you pick. It also shows how much of the end result is interest.
The rate, the fees and the years matter far more than how often interest is added.
How the calculator compounds
P is your starting amount and i is the annual rate divided by the compounding periods per year. The number of periods is n, and M is the deposit per period.
Deposits land at the end of each period. With quarterly compounding, three months of deposits arrive together at the quarter's end. With annual compounding, the whole year's deposits arrive at the year's end and only start earning the year after.
Which rate should you enter?
Banks quote an annual percentage yield (APY). The federal Truth in Savings rule, Regulation DD, sets how the APY is worked out. It's based on "the interest rate and the frequency of compounding." So it already includes compounding. Here's $10,000 at 4% for ten years:
| Compounding | Rate entered | After 10 years |
|---|---|---|
| Annually | 4% | $14,802.44 |
| Quarterly | 4% | $14,888.64 |
| Monthly | 4% | $14,908.33 |
| Monthly, rate converted from a 4% APY | 3.93% | $14,802.44 |
If that 4% is an APY, only the annual 4% row is right. The monthly row counts the compounding twice and overstates the result by about $106.
For a lump sum, enter the APY and choose annually. With monthly deposits, convert the APY to a monthly-compounded rate first: 12 × ((1 + APY)^(1 ÷ 12) − 1). For a 4% APY that's 3.93%, and the last row shows it lands on the same balance. The APY calculator goes the other way, from a quoted rate to its APY.
Ten extra years do the work of double deposits
Time can do as much for you as a bigger deposit. Here's what an example 6% a year does with three plans:
| Plan | Paid in | Balance | Interest |
|---|---|---|---|
| $200 a month for 40 years | $96,000 | $398,298 | $302,298 |
| $200 a month for 30 years | $72,000 | $200,903 | $128,903 |
| $400 a month for 30 years | $144,000 | $401,806 | $257,806 |
Starting ten years later and doubling your deposits ends up in about the same place. It just takes $48,000 more of your own money ($144,000 against $96,000). That's why a late start is so expensive to catch up.
The last decade adds the most
What $200 a month grows to at 6%
Balance after each decade, compounded monthly, no starting amount
The fourth decade alone adds $197,395. That's more than twice everything you deposit in 40 years. Actual returns won't be a steady 6%, but the shape holds: the late years carry the result.
A 1% fee takes a third of the growth
To model a fund or adviser fee, enter the return after fees: (1 + return) × (1 − fee) − 1. For 4% and a 1% fee, that's 2.96%. Here's $100,000 left for 20 years:
| Annual fee | Return after fees | After 20 years |
|---|---|---|
| None | 4% | $219,112 |
| 0.25% | 3.74% | $208,413 |
| 0.50% | 3.48% | $198,211 |
| 1.00% | 2.96% | $179,213 |
The SEC's investor bulletin on fees works through the same case and gets approximately $208,000, $198,000 and $179,000. With no fee, growth is $119,112. The 1% fee removes $39,899 of it, about a third.
Check any result with the Rule of 72
Investor.gov suggests dividing 72 by the rate of return to estimate the years it takes money to double. Its example: at 9%, about every 8 years. At 6%, it's 12 years, and 1.06 to the power of 12 is 2.01, so the shortcut holds.
If the calculator shows money doubling much faster or slower, check the rate and years you entered. The Rule of 72 calculator gives the doubling time for any rate.
Inflation shrinks what the balance buys
The result is in future dollars, before any tax. The Federal Reserve aims for 2% inflation a year over the longer run. It measures that with the personal consumption expenditures (PCE) price index.
At 2% a year, prices rise by a factor of 1.02^40 ≈ 2.21 in 40 years. So the $398,298 from the first plan buys roughly what $180,400 buys today. The inflation calculator shows how prices grow at any rate.
Sources
- Investor.gov (SEC), What is compound interest? (accessed September 26, 2026)
- SEC Office of Investor Education and Advocacy, How Fees and Expenses Affect Your Investment Portfolio (July 23, 2025)
- CFPB, Regulation DD, Appendix A to Part 1030: Annual Percentage Yield Calculation
- Federal Reserve, Why does the Federal Reserve aim for inflation of 2 percent over the longer run? (updated August 22, 2025)