Compound interest calculator

How to read it

The result splits your balance into what you put in and what the money earned. Over long periods the growth overtakes the contributions, which is the whole argument for starting early. At a 6% return, $500 a month grows to about $231,000 in 20 years and about $502,000 in 30, so the last ten years add more than the first twenty.

Inflation matters as much as the return. A balance that looks large in 25 years buys less than the same figure today, so the calculator shows both.

Where tax comes in

The figures assume no tax on the growth. In a taxable account, interest and dividends are taxed each year and gains when you sell, which slows the compounding. In a 401(k) or traditional IRA the tax waits until you withdraw, and in a Roth it may never come. Where you save deserves as much thought as how much.

Common questions

Which compounding option should I pick?

For a savings account, use whatever the bank quotes, often daily or monthly. For investments, annual is the cautious choice. The difference is small next to the return you assume.

Is a 6% return realistic?

Nobody can promise one. It is a common planning figure for a diversified stock portfolio over long periods, and far too high for cash. Try a few rates and plan around the lower ones.

Planning for retirement, or a goal like college? That is part of our work with individuals, alongside your financial advisor.

More free tools: the Solo 401(k) vs SEP-IRA calculator, the mortgage amortization calculator, and all our calculators.

Important: This calculator gives a general illustration for planning only. It is not financial, investment, lending or tax advice, and using it does not make you a client of Titus CPAs. Results rely on the numbers you enter and on simplified assumptions. Actual returns, rates and loan terms will differ, so the results may be incomplete or wrong for your situation. Talk to your financial or tax professional, or your lender, before you make a decision.