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Compound interest calculator
Enter what you have today, what you can add — every week, month, quarter or year — and a rate, and instantly see what your money grows into, with the interest split out from your own contributions. Free, and nothing to sign up for.
$
The money you start with today.$
What you add on each contribution, at the frequency you pick below.How often you add the amount above.
%
Effective annual rate (APY). 7% is a common long-run stock estimate.How long you let the money grow.
All amounts above are in this currency.
Future value$36,177
Total contributed$25,000
Interest earned$11,177
Contribution$25,000Profit$11,177Year 10 · Total $36,177
Year 0Year 5Year 10
Year by year
YearContributedBalance
1$3,400$3,546
2$5,800$6,270
3$8,200$9,185
4$10,600$12,304
5$13,000$15,642
6$15,400$19,213
7$17,800$23,034
8$20,200$27,122
9$22,600$31,497
10$25,000$36,177
Typing these numbers by hand? Guaca tracks them for you — accounts, investments and exchange rates update automatically, every day.
Start freeWhat is compound interest?
Compound interest is interest that earns interest. In year one your money grows on what you put in; in year two it grows on what you put in pluswhat it already earned; in year three, on all of the above. It is the classic snowball: small and slow at first, then picking up more snow with every turn. The frustrating part is that the magic is boring for years — and then, seemingly overnight, a single year’s interest exceeds everything you contributed in the first five.
That is what separates it from simple interest, which is always calculated on the original principal and grows in a straight line. Compound growth follows a curve, and that curve is why Einstein supposedly (and probably apocryphally) called it the eighth wonder of the world. You do not need the quote to see it: raise the years in the calculator above and watch the final rows of the year-by-year table pull away from the early ones.
The formula, without the pain
FV = P × (1 + r)n
FV is the future value — what you end up with. P is the principal, what you put in today. r is the interest rate per period, and n is how many periods the money keeps working. The exponent is the heart of it: the rate is not applied once, it is applied again and again to an ever-larger balance.
When you also contribute on a schedule, every contribution starts its own snowball: the first one compounds for the whole horizon, the last one barely gets rolling. The calculator does that full sum for you, converting your effective annual rate into its per-period equivalent — (1 + rate)1/p − 1, where p is your contribution frequency — so the yearly result matches the rate you typed, whichever frequency you choose.
Why time beats the amount
In the formula, the amount enters as a multiplier but time enters as an exponent — and exponents always win. A round-number example: two people invest $300 a month at 7%, and both stop at 65. The one who starts at 25 ends up with about $790,000, having contributed $144,000 out of pocket. The one who starts at 35 — same contribution, same rate — ends up with about $367,000, having contributed $108,000.
Read that again: for just $36,000 more in contributions, the earlier starter finishes with roughly $420,000 more. Those first ten years are not valuable for the deposits they add, but for the decades of compounding they hand to every dollar. The practical takeaway is unglamorous but powerful: the best time to start was ten years ago; the second best is this month, even with a small amount.
The recurring contribution is the real engine
The lump sum gets all the attention, but for most people the engine is the steady contribution. Compare: $10,000 invested today at 7%, left alone, becomes about $38,700 in 20 years. Not bad. But that same $10,000 plus $200 a month ends up near $137,000: you contributed $58,000 in total and compounding put in the rest. Doubling the monthly contribution usually moves the final number far more than doubling the starting amount — try it in the calculator and watch the split between the blue and green bars shift.
A recurring contribution does two jobs at once: it feeds the snowball fresh snow every period, and it protects you from waiting for the “perfect moment” to invest. An automatic transfer on payday turns discipline into a habit that does not depend on willpower — which is why the frequency worth picking is simply the one that matches your paycheck.
Where it shows up in real life
Compound interest is not textbook theory: it is in savings accounts and CDs when you roll principal plus interest at maturity, in index funds and ETFs when dividends are reinvested instead of withdrawn, and in retirement accounts, where decades of compounding do the heavy lifting. The rule common to all of them: compounding only happens if the earnings stay in. Every withdrawal is snow taken off the snowball.
And it has a dark side: credit cards compound exactly the same way, but against you. A balance receiving only minimum payments grows like any investment on this page — except the investor is the bank and the return is paid by you. That is why clearing expensive debt is, mathematically, the best “investment” available: nothing legal guarantees you 25% a year, except no longer paying it.
How Guaca helps
This calculator shows you the projection; Guaca shows you the reality. In the app you watch your investments actually grow — funds, stocks, CDs, crypto — with prices and exchange rates updated automatically, nothing typed by hand. Your net worth recalculates on its own, and when it grows you can see how much came from the market, how much from currency moves and how much from your own contributions. And if you want to take the snowball to its logical conclusion, the FIRE calculator tells you when compounding could start paying your bills for you — or go deeper with the retirement calculator.
This calculator is an educational tool and is not investment advice.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is always calculated on the original principal: put in $10,000 at 7% and you earn $700 every year, forever. Compound interest adds each period's earnings to the balance, so the next calculation runs on the new, larger total — year two earns on $10,700, year three on $11,449, and so on. Early on the difference is small; over decades it becomes enormous, because compound growth follows a curve while simple interest follows a straight line.
What rate should I enter — APY or APR?
Enter an effective annual rate, which is what APY (annual percentage yield) measures — the real yearly growth after compounding is accounted for. APR (annual percentage rate) is a nominal rate that ignores intra-year compounding, so it slightly understates what you actually earn. Savings accounts and CDs usually advertise APY, which you can type in directly. For long-term stock projections there is no advertised rate; 7% nominal (roughly 5% after inflation) is a common long-run estimate for a diversified index portfolio, but consider running conservative and optimistic scenarios too.
How often does this calculator compound?
At the same frequency as your contributions. The calculator converts the effective annual rate you enter into its per-period equivalent — (1 + rate)^(1/periods per year) − 1 — and grows the balance each period, right when your contribution lands. Because it starts from an effective annual rate, the yearly outcome stays consistent no matter which frequency you pick: compounding more often does not inflate the result. Real products may compound daily, monthly or at maturity; over multi-year horizons the practical difference is small.
Does contributing weekly instead of monthly make a big difference?
Less than most people expect. Contributing $50 a week instead of $217 a month gets money working slightly sooner on average, but over 20 years the gap is typically a fraction of a percent of the final balance. What actually moves the needle is the total amount you contribute and how many years it compounds. Pick the frequency that matches your paycheck so the habit sticks — automation beats optimization here.
Does compound interest work against me on debt?
Yes, and that is where it hurts most. A credit card at 25% APR compounds against you with the same math that works for you on this page: pay only the minimum and interest is added to the balance, so next month you pay interest on interest. That is why paying off a card charging 25% is usually a better move than investing for a hoped-for 8% — clearing the debt is a guaranteed, tax-free 25% return.
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