The power of compound interest
Compound interest means you earn interest on your interest, not just on your original amount. Over long periods this snowballs — which is why starting early matters so much. This calculator compounds monthly and adds your regular contribution each month.
How it's calculated
The future value is the growth of your starting amount plus the growth of every monthly contribution:
FV = P(1 + r)ⁿ + PMT × ((1 + r)ⁿ − 1) ÷ r
where P is the starting amount, PMT the monthly contribution, r the monthly rate (annual ÷ 12) and n the number of months.
Interest earned
The interest earned is your future value minus everything you put in (starting amount + all contributions). The longer the time and the higher the rate, the larger this share becomes.
Notes
- This assumes a constant rate and monthly compounding; real returns vary year to year.
- It does not account for inflation, taxes or fees, which reduce real returns.
Why does starting early matter?
Because compounding accelerates over time — money invested for 30 years grows far more than the same amount for 15 years, even with the same contributions.
Is this guaranteed?
No. Investment returns are not guaranteed and vary. Use this as an illustration of how compounding works, not a promise of returns.
More money calculators
This calculator illustrates compound growth using a constant rate and monthly compounding, and is for general information only — it is not financial or investment advice. Real returns vary and are not guaranteed; it excludes inflation, taxes and fees. WorldTax is independent.