What is the value of compound interest?

Compound interest can have a dramatic effect on the growth of an investment. Use this compound interest calculator to illustrate the impact of compound interest on the future value of an asset.

Savings

Initial balance or deposit ?

The amount already saved before this projection begins.

Annual savings amount ?

How much you plan to add to the account each year.

Assumptions

Number of years for the analysis ?

How many years the projection should run.

Before-tax return on savings ?

The annual growth rate you expect on the balance, before any taxes.

Table of Historic Rates of Return. Inflation 2.9%, U.S. Treasury Bills 3.3%, Long-term Government Bonds 5.0%, U.S. Large-Company Stocks 10.4%, and U.S. Small-Company Stocks 11.8%. Past performance is no guarantee of future results. Source: Ibbotson SBBI 1926-2024

Advanced options 1

Annual increase in contributions ?

How much your yearly contribution grows each year, for example to keep pace with a rising income.

Enter your values and select Calculate.

The total accumulation is your projected ending balance: what you start with, plus every year's contribution, plus however much interest compounds on top. It is a projection, not a promise — actual markets move unevenly from year to year even when the long-run average matches the rate you entered.

Two inputs do most of the work here: the before-tax return and the number of years. A small change in the assumed return compounds a lot over a long horizon, so it's worth testing a lower and a higher rate to see how wide the range of outcomes becomes. The annual savings amount and its yearly increase matter too, especially early on when interest has less time to build.

This figure leaves out taxes, fees, and inflation, all of which would reduce what the balance is actually worth to you in the future. It also assumes a steady, uninterrupted return, which real investments rarely deliver in a straight line.

Revisit this calculation whenever your savings rate changes, you get a raise, or your expected return assumption shifts — and at least once a year as a general check-in. Having a number to work from, even an approximate one, puts you ahead of not planning at all, and small increases to your contributions now tend to matter more than they look like they would today.

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.