Interest on
the interest.
A starting amount and a monthly deposit, growing at a steady rate. See what it becomes, how much of it you put in and how much the interest earned, year by year.
Daily, monthly, quarterly or yearly compounding · Deposits at the start or end of the month · In today’s dollars
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After 20 years
$300,851
You put in
$130,000
Interest earned
$170,851
After 20 years
Final balance
$300,851
- Starting amount
- $10,000
- Monthly deposits 240 deposits
- $120,000
- Interest earned
- $170,851
- In today’s dollars
- $0
- Final balance
- $300,851
An illustration at a steady rate, before tax and fees. Real investments rise and fall; a savings account or CD pays its stated rate. The rate is converted to an equal monthly rate for your compounding, and each deposit earns from the month it arrives.
Figures checked November 2026. The rate, years and inflation are yours; the defaults are illustrations. Inflation background: BLS, consumer price index.
Year by year
Balances at the end of each year
| Year | Put in this year | Interest this year | Total put in | Total interest | Balance | In today’s dollars |
|---|
How it works.
Interest earns interest
Each period, the interest is added to the balance. Next period, the rate applies to that larger balance, so the interest itself starts earning. Early on the growth is mostly your deposits; later, most of it is interest.
The formula
With a monthly rate i, a starting amount P, a monthly deposit D and n months:
P × (1 + i)n + D × ((1 + i)n − 1) ÷ i
Deposits at the start of the month earn one more month: multiply the second part by (1 + i).
Compounding and the monthly rate
A yearly rate r compounded k times a year grows by (1 + r/k)k in a year. This calculator turns that into the equal monthly rate, i = (1 + r/k)k/12 − 1, so monthly deposits can be added on time.
Questions
What is compound interest?
Compound interest is interest paid on both the money you put in and the interest it has already earned. Simple interest is paid only on the original amount. Over long periods the difference is large, because the interest keeps adding to the base it is figured on.
Does it matter how often interest is compounded?
A little. At 7% a year, monthly compounding grows $10,000 to about $40,387 in 20 years, and daily compounding to about $40,547, while yearly compounding gives $38,697. The rate and the number of years matter far more than the compounding frequency.
Should I add money at the start or the end of the month?
A deposit made at the start of the month earns interest for that month, so it ends slightly ahead. Over 20 years at 7%, $500 a month comes to about $1,520 more when it goes in at the start of each month instead of the end.
What rate should I use?
Use the rate the account actually pays for a savings account or CD (its APY). For investments there is no fixed rate: returns change from year to year and can be negative. Try a lower and a higher rate to see the range, and treat any single result as an illustration, not a promise.
What does “in today’s dollars” mean?
Prices rise over time, so a dollar in 20 years buys less than a dollar today. Turning on today’s dollars divides each year’s balance by the growth in prices at the inflation rate you choose, which shows what the balance would buy at today’s prices.