Savings Calculator

What compound interest is

Compound interest means the interest you earn gets added to your balance, so the next interest payment is calculated on a larger amount. Over time this makes savings grow faster than with simple interest, where only the starting amount earns a return. This calculator compounds monthly, and you can add a fixed monthly contribution that grows from its own point of deposit onward.

The formula

The base compound interest formula without ongoing contributions is:

A = P × (1 + r/n)^(n×t)

P is the starting amount, r is the annual interest rate (as a decimal), n is how many times per year interest is added, and t is the number of years. With a monthly contribution, each deposit is added to the balance and grows from its own starting point forward, which is what the calculator above computes.

How much compounding frequency actually matters

The more often interest is added, the more the balance grows, but the difference is smaller than most people expect. $10,000 at a 6% annual rate over ten years grows to about $18,190 with annual compounding, and only marginally more, about $18,220, with monthly compounding. It's still worth choosing an account that compounds more often, but it isn't the factor that moves the final result the most — savings horizon and interest rate matter far more.

The Rule of 72, a quick shortcut

To quickly estimate how long it takes a savings amount to double, divide 72 by the interest rate. At 6% interest, that's roughly 72 / 6 = 12 years. It's a simplification, not an exact calculation, but good enough to compare interest rates in your head.

Limitations

The result is a projection based on a constant interest rate you provide. Real savings accounts, funds, and investments have rates and returns that vary over time, and the result doesn't account for tax or inflation. Treat it as guidance for comparing scenarios, not a guaranteed future amount.