How to use this calculator
- Enter your starting amount and how much you’ll add each month or year.
- Enter the rate: the APY for a savings account or CD, or an expected average return for investments, which isn’t guaranteed.
- Choose the compounding your bank uses (most savings accounts compound daily or monthly) and when you’ll make deposits.
- Add inflation and tax to see what the money will really buy. Interest in a regular savings account is taxed each year; in a 401(k) or IRA it isn’t.
The compound interest formula
Example: $10,000 at 5% compounded monthly, plus $200 at the end of every month for 10 years, grows to $47,527. You deposit $34,000 in total and earn $13,527 of interest. With 2.5% inflation, that balance buys what about $37,128 buys today.
How often interest compounds
The more often interest is added, the higher the effective yearly yield (APY), though the difference is small:
| Compounding | APY at 3% | APY at 5% | $10,000 after 10 years at 5% |
|---|---|---|---|
| Yearly | 3.000% | 5.000% | $16,288.95 |
| Quarterly | 3.034% | 5.095% | $16,436.19 |
| Monthly | 3.042% | 5.116% | $16,470.09 |
| Daily | 3.045% | 5.127% | $16,486.65 |
Banks must quote savings rates as an APY under the Truth in Savings Act, so compare APYs rather than interest rates. The rate and how long you save matter far more than the compounding frequency.
How much your money could grow
A one-time $10,000 deposit, compounded monthly, with no further deposits:
| Rate | 5 years | 10 years | 20 years | 30 years |
|---|---|---|---|---|
| 3% | $11,616 | $13,494 | $18,208 | $24,568 |
| 5% | $12,834 | $16,470 | $27,126 | $44,677 |
| 7% | $14,176 | $20,097 | $40,387 | $81,165 |
| 10% | $16,453 | $27,070 | $73,281 | $198,374 |
Monthly deposits starting from zero, at 7% a year compounded monthly:
| Monthly deposit | 10 years | 20 years | 30 years |
|---|---|---|---|
| $100 | $17,308 | $52,093 | $121,997 |
| $250 | $43,271 | $130,232 | $304,993 |
| $500 | $86,542 | $260,463 | $609,985 |
| $1,000 | $173,085 | $520,927 | $1,219,971 |
Over 30 years, most of the final balance is interest rather than deposits. That’s the power of starting early, and it’s the same math behind a 401(k) or a child’s Trump Account.
How much to save each month for a goal
To reach a goal, divide it by how much each monthly dollar grows to by the deadline. At 5% a year, compounded monthly, with deposits at the end of each month:
| Goal | In 5 years | In 10 years | In 20 years |
|---|---|---|---|
| $10,000 | $147/mo | $64/mo | $24/mo |
| $25,000 | $368/mo | $161/mo | $61/mo |
| $50,000 | $735/mo | $322/mo | $122/mo |
| $100,000 | $1,470/mo | $644/mo | $243/mo |
A savings account or CD earns less than 5% when rates fall, and stock returns vary from year to year, so treat the table as a planning estimate. For a home down payment, the house affordability calculator shows how much cash you’ll need at closing.
Why starting early matters
Time does more of the work than the amount you save. Saving $200 a month at 7% a year from age 25 to 65 grows to about $524,963. Starting at 35 and saving the same amount until 65 gives about $243,994: $24,000 less put in, but $280,968 less at the end. In a workplace plan, the 401(k) calculator adds your employer match to the same math.
The rule of 72
A quick way to estimate how long money takes to double: divide 72 by the yearly rate.
| Yearly rate | Rule of 72 | Exact (compounded yearly) |
|---|---|---|
| 2% | 36.0 years | 35.0 years |
| 4% | 18.0 years | 17.7 years |
| 6% | 12.0 years | 11.9 years |
| 8% | 9.0 years | 9.0 years |
| 10% | 7.2 years | 7.3 years |
| 12% | 6.0 years | 6.1 years |
Inflation and taxes
What matters is what your money can buy. If savings earn 4% while prices rise 3%, your real return is only about 1%, and less after tax. Interest from savings accounts, CDs and bonds in a taxable account is taxed as ordinary income each year, which slows compounding. The same money in a 401(k), IRA, HSA or Roth account compounds without that yearly tax drag.
Savings accounts and CDs pay a known rate and are insured by the FDIC or NCUA up to the limits. Stock and bond funds can earn more over long periods but go up and down, sometimes sharply, so treat any return you enter for them as an assumption, not a promise.
Frequently asked questions
What is compound interest?
How much will $10,000 be worth in 10 years?
What is the difference between APR and APY?
How long does it take to double my money?
Does compound interest work against me on debt?
Sources
- Compound interest calculator — U.S. Securities and Exchange Commission (Investor.gov)
- What is compound interest? — U.S. Securities and Exchange Commission (Investor.gov)
- Appendix A to Part 1030: annual percentage yield calculation (Regulation DD) — Consumer Financial Protection Bureau