Enter an initial amount, monthly contributions, rate and time to see the snowball effect of interest on interest.
| Year | Invested | Interest | Balance |
|---|---|---|---|
| 0 | $1,000 | $0 | $1,000 |
| 1 | $3,400 | $167 | $3,567 |
| 2 | $5,800 | $539 | $6,339 |
| 3 | $8,200 | $1,133 | $9,333 |
| 4 | $10,600 | $1,966 | $12,566 |
| 5 | $13,000 | $3,058 | $16,058 |
| 6 | $15,400 | $4,430 | $19,830 |
| 7 | $17,800 | $6,103 | $23,903 |
| 8 | $20,200 | $8,102 | $28,302 |
| 9 | $22,600 | $10,453 | $33,053 |
| 10 | $25,000 | $13,184 | $38,184 |
| 11 | $27,400 | $16,325 | $43,725 |
| 12 | $29,800 | $19,910 | $49,710 |
| 13 | $32,200 | $23,974 | $56,174 |
| 14 | $34,600 | $28,554 | $63,154 |
| 15 | $37,000 | $33,693 | $70,693 |
| 16 | $39,400 | $39,436 | $78,836 |
| 17 | $41,800 | $45,829 | $87,629 |
| 18 | $44,200 | $52,926 | $97,126 |
| 19 | $46,600 | $60,783 | $107,383 |
| 20 | $49,000 | $69,461 | $118,461 |
| 21 | $51,400 | $79,024 | $130,424 |
| 22 | $53,800 | $89,545 | $143,345 |
| 23 | $56,200 | $101,100 | $157,300 |
| 24 | $58,600 | $113,770 | $172,370 |
| 25 | $61,000 | $127,647 | $188,647 |
| 26 | $63,400 | $142,825 | $206,225 |
| 27 | $65,800 | $159,410 | $225,210 |
| 28 | $68,200 | $177,514 | $245,714 |
| 29 | $70,600 | $197,257 | $267,857 |
| 30 | $73,000 | $218,773 | $291,773 |
Compound interest means that every month the return is calculated over everything you have accumulated so far — your deposits plus all the interest already earned. That is why the curve bends upward: at the beginning most of the growth comes from your contributions, but over the years the interest itself becomes the main driver.
FV = P × (1 + i)ⁿ + PMT × [((1 + i)ⁿ − 1) / i]
FV is the future value, P the initial investment, PMT the monthly contribution, i the monthly rate (the annual rate converted to an effective monthly rate) and n the number of months.
This calculator compounds monthly, which is how most savings accounts, bonds and investment funds credit returns. Rates are held constant over the whole period — in real life returns fluctuate, so treat the result as a scenario, not a promise.
Imagine investing $1,000 upfront and adding $200 every month at 8% per year. After 10 years you have $38,184 — you deposited $25,000 and interest added $13,184. After 20 years the balance reaches $118,461, and interest already accounts for 59% of it.
Hold on for 30 years and the picture flips: $291,773 in total, of which only $73,000 came out of your pocket. The other $218,773 — 75% of the final balance — is pure interest on interest. Try it above: shorten the period and watch how the final years are what really bend the curve.
With simple interest, the rate applies only to the original amount, so growth is linear. With compound interest, the rate applies to the accumulated balance — deposits plus previously earned interest — so growth accelerates over time. Long-term investments almost always use compound interest.
By dividing the growth factor, not the rate itself: monthly rate = (1 + annual rate)^(1/12) − 1. For example, 12% per year is about 0.949% per month, not 1%. This calculator does the conversion automatically.
No. The simulation assumes a constant rate, which real investments do not have, and ignores taxes, fees and inflation. Use it to compare scenarios and understand the mechanics, not as a prediction.
Estimates for educational purposes only, based on constant rates. Real investments and loans vary — consult a qualified professional before making financial decisions.