Compound Interest Calculator
Project the future value of a savings account, 401(k), Roth IRA, or brokerage account using compound interest. Enter a starting amount, expected return, and optional monthly contributions to see how the snowball builds — and how much of the end balance came from your contributions versus growth.
How is this calculated?
For a lump sum: FV = P × (1 + r/n)^(n×t), where P is principal, r is annual rate, n is compounding periods per year, and t is years. Adding regular contributions uses the future value of an ordinary annuity formula: PMT × [(1 + r/n)^(n×t) − 1] / (r/n). Returns shown are gross. Inside a Roth IRA growth and qualifying withdrawals are tax-free. Inside a Traditional IRA or 401(k) growth is tax-deferred but withdrawals are taxed as ordinary income. In a taxable brokerage account, interest, dividends, and realized gains are taxed annually per IRS rules.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original deposit and on the interest already credited. The base on which interest is calculated grows each period, producing exponential rather than linear growth. Time is the largest single lever — doubling the time horizon usually does more for the end balance than doubling the rate.
How does tax-advantaged compounding work?
In a Roth IRA or Roth 401(k), contributions are after-tax but all growth and qualifying withdrawals are tax-free. In a Traditional IRA, 401(k), or HSA, contributions reduce current taxable income and growth compounds tax-deferred. The lack of annual tax drag inside these wrappers can add 0.5–1% per year to net returns over decades.
Does compounding frequency matter?
Modestly. A nominal 5% rate compounded monthly produces an effective annual rate of about 5.116%; daily compounding pushes it to roughly 5.127%. Most U.S. financial products quote APY (Annual Percentage Yield), which already accounts for compounding frequency, allowing apples-to-apples comparison.
How much will $10,000 grow in 30 years?
At 7% annual growth — close to the long-run real return of U.S. equities — $10,000 reaches around $76,123 over 30 years. At 10% (closer to long-run nominal S&P 500 returns), it reaches roughly $174,494. Adding $500 per month at 7% lifts the end balance past $660,000.
Last updated: May 2026 · Rates sourced from IRS