Compound interest calculator

Enter a starting amount, a monthly contribution, a return and a number of years to see how compounding builds the balance. Then see what the same plan would have returned at the worst, median and best real stock market periods of the same length.

Initial amountMonthly contributionYearsAnnual return (%)Raise contributions each year (%)

Final value: 191,819
Total contributed: 82,000
Growth from returns: 109,819
Share from returns: 57%

BalanceTotal contributed

The same plan with real market history

Over every 20-year period of the S&P 500 (SPY, dividends reinvested) (1 periods), the annualised return ranged from +11.0% to +11.0%, with a median of +11.0%. At those rates this plan would end at 324,009, 324,009 and 324,009.

Year-by-year table

Year	Contributed	Growth	Balance
1	13,600	835	14,435
2	17,200	1,981	19,181
3	20,800	3,458	24,258
4	24,400	5,292	29,692
5	28,000	7,505	35,505
6	31,600	10,125	41,725
7	35,200	13,181	48,381
8	38,800	16,703	55,503
9	42,400	20,723	63,123
10	46,000	25,277	71,277
11	49,600	30,402	80,002
12	53,200	36,137	89,337
13	56,800	42,526	99,326
14	60,400	49,613	110,013
15	64,000	57,449	121,449
16	67,600	66,086	133,686
17	71,200	75,579	146,779
18	74,800	85,989	160,789
19	78,400	97,379	175,779
20	82,000	109,819	191,819

How compounding works

The balance grows by the monthly equivalent of the annual return, and every contribution starts compounding from the month it is added. The share of the final value that comes from returns rather than contributions grows with time: that is why starting early matters so much.

A fixed rate makes the line smooth; real markets do not. The historical box replaces the fixed rate with the actual annualised returns of every period of the same length in the S&P 500, dividends included.

Questions

What is compound interest?

Earning returns on past returns as well as on the money you put in. Each year’s growth is added to the balance and grows in turn, so the curve gets steeper over time: over long periods most of the final value can come from growth rather than from contributions.

Which return should I use?

For a stock-heavy portfolio, long-run US stock returns have averaged roughly 7% a year after inflation in the data used by most studies, and less for mixes with bonds. The box under the chart shows what real S&P 500 periods of the same length returned, from worst to best, so you can test the plan against history instead of a single number.

Are contributions added at the start or the end of the month?

At the start of each month, and the return is applied monthly. Raising contributions each year models a savings plan that grows with income.

Does it include inflation, taxes and fees?

No. Use a return after inflation to see the result in today’s money, and the fee impact calculator to see what costs take over the years.

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Source: MarketStack end-of-day prices, total return with dividends reinvested. Figures are historical and descriptive; they are not forecasts and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.