Compound Interest

See how a starting balance plus steady monthly contributions can grow when interest compounds every month. Adjust the rate and time horizon to watch the gap between what you put in and what you end up with.

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💡 Good to know: The "eighth wonder of the world" quote about compound interest is almost certainly misattributed to Einstein — but the math is real.

Worked example

Future value: $108,224.07 · Contributed: $49,000.00 · Interest: $59,224.07

How it’s solved

Worked on the example above, step by step — follow along and you can do it on paper next time, no tool required.

Each month the balance earns interest, then your contribution is added — repeated for the whole horizon.
Monthly rate = APR ÷ 100 ÷ 12
7 ÷ 100 ÷ 12 = 0.005833
Months = years × 12
20 × 12 = 240
Apply balance × (1 + rate) + contribution each month
after 240 months → $108,224.07
Contributed = start + monthly × months
$1,000.00 + $200.00 × 240 = $49,000.00
Interest earned = future value − contributed
$108,224.07 − $49,000.00 = $59,224.07

Learn the method

Inputs

Start $
1000
Monthly add $
200
APR %
7
Years
20

Frequently asked

How often does it compound?

Monthly. Each month the balance earns interest and then your contribution is added.

What is 'Contributed' vs 'Interest'?

Contributed is the total cash you put in (start plus every monthly add); Interest is everything the account earned on top of that.