Compound Interest Calculator
See how your money grows with compound interest and monthly contributions. Year-by-year breakdown so you understand exactly where the growth comes from.
- Contributions
- $130,000
- Interest earned
- +$170,851
Year-by-year breakdown
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| 1 | $16,000 | $919 | $16,919 |
| 2 | $22,000 | $2,339 | $24,339 |
| 3 | $28,000 | $4,294 | $32,294 |
| 4 | $34,000 | $6,825 | $40,825 |
| 5 | $40,000 | $9,973 | $49,973 |
| 6 | $46,000 | $13,782 | $59,782 |
| 7 | $52,000 | $18,299 | $70,299 |
| 8 | $58,000 | $23,578 | $81,578 |
| 9 | $64,000 | $29,671 | $93,671 |
| 10 | $70,000 | $36,639 | $106,639 |
| 11 | $76,000 | $44,544 | $120,544 |
| 12 | $82,000 | $53,455 | $135,455 |
| 13 | $88,000 | $63,443 | $151,443 |
| 14 | $94,000 | $74,587 | $168,587 |
| 15 | $100,000 | $86,971 | $186,971 |
| 16 | $106,000 | $100,683 | $206,683 |
| 17 | $112,000 | $115,820 | $227,820 |
| 18 | $118,000 | $132,486 | $250,486 |
| 19 | $124,000 | $150,790 | $274,790 |
| 20 | $130,000 | $170,851 | $300,851 |
The math behind compounding
Compound interest pays interest on your interest. Each period, the new interest gets added to your principal, and the next period's interest is calculated on the larger balance.
Where P = principal, r = annual rate, n = compounding periods per year, t = years, and PMT = contribution per period.
The single biggest factor is time. Doubling the rate doesn't double your end balance, but doubling the years usually quadruples it. That's why early consistent investing beats a late high-rate sprint.
Frequently asked questions
Simple interest is calculated only on the original principal. Compound interest pays interest on your interest — so as your balance grows, you earn more each year. Over decades, this difference is enormous.
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