Reckonary / Finance / Compound interest
Future value
That's about $4,329 a year, for life — what a 4% withdrawal would pay you without touching the balance.
Same math, shown. No hidden assumptions.
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Compound interest is the interest you earn on both your original money and on the interest it has already earned. Over years, that snowball is what turns steady saving into a meaningfully larger balance. Use the calculator to see how a starting amount and a monthly contribution grow at a given rate.
Pick how often interest compounds — daily, monthly, quarterly, or yearly. Your balance earns its share of the annual rate that often, and your monthly contribution is added each month either way. Future value combines two parts: your starting balance growing on its own, plus the growing stream of monthly contributions. The ledger bar under the result shows how much of the total is your own money versus interest earned.
The more often interest is added, the sooner it starts earning interest of its own — so a higher frequency grows a little faster. The effect is real but usually modest next to the rate and the time horizon. On $1,000 at 12% for one year with no contributions:
Roughly seven dollars separates yearly from daily on a thousand. Stretch that across a larger balance and thirty years and the gap grows, but the annual rate and how long you stay invested move the result far more than the compounding frequency does.
Start with $1,000, add $200 a month, and assume a 7% annual return for 20 years. You contribute $49,000 of your own money, and compounding does the rest — the longer the horizon, the larger the interest slice becomes relative to what you put in. For a quick head-math version of the same idea, the rule of 70 vs 72 guide shows how to estimate doubling time without a calculator at all.
How often is interest compounded here?
You choose — daily, monthly, quarterly, or yearly. Monthly is the default. Your monthly contribution is added each month regardless; the frequency only changes how often the balance itself earns interest.
Does daily compounding make a big difference?
Usually a small one. On $1,000 at 12% for a year with no contributions, daily compounding grows to about $1,127 versus $1,120 for yearly — around seven dollars on a thousand. The gap widens with bigger balances, higher rates, and longer horizons, but the annual rate matters far more than how often it compounds.
Does it account for taxes or inflation?
No. The result is before taxes, fees, and inflation, so treat it as a gross estimate of growth rather than spendable money.
What annual rate should I use?
A long-run stock market average is often cited near 7% after inflation, but real returns vary a lot year to year. Try a range to see best and worst cases.
What's the difference between simple and compound interest?
Simple interest is paid only on your original principal. Compound interest is paid on the principal plus the interest already earned, which is why the balance speeds up over time.
Last reviewed June 2026. This tool is for education, not financial advice.