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Project the future value of savings or an investment with compound interest, optional monthly deposits, and an inflation-adjusted figure. Press Calculate.

Written and reviewed by SM Arijul Islam · Last reviewed 21 October 2026 · Editorial standards · Report an error

How compound growth works

Compound interest pays interest on interest. The more often it compounds, the faster the balance grows, which is why the effective annual rate is slightly higher than the headline rate when compounding happens more than once a year.

Lump sum: FV = P × (1 + r ÷ n)^n×t
Deposits use the future value of an annuity formula with the same rate and frequency
Effective annual rate = (1 + r ÷ n)ⁿ − 1
Real value = future value ÷ (1 + inflation)^t

Projections assume a constant rate. Real markets fluctuate, so treat the result as a scenario, not a promise. This is not financial advice.

Worked example

Investing 5,000 at 7% compounded annually for 10 years grows to 5,000 × 1.07¹⁰, which is about 9,835.76 — an increase of roughly 4,836. Add a monthly contribution and the ending balance rises further.

Compound growth: A = P × (1 + r ÷ n)^(n × t), where P is the principal, r the annual rate, n the compounds per year and t the number of years.

Everyday uses

Projecting a savings or investment balance
Comparing accounts with different compounding
Estimating how long a goal will take
Understanding the effect of regular deposits
Stress-testing a plan at different rates

Frequently asked questions

What does the compounding frequency change?

More frequent compounding slightly increases the effective rate: 7% compounded monthly is an effective 7.23% a year, against 7% compounded annually.

How is this different from simple interest?

Simple interest is paid only on the original principal, so it grows in a straight line rather than a curve.

Should I model inflation separately?

Yes, for long horizons. Inflation reduces purchasing power, so real returns matter more than headline ones.

What annual return should I assume?

Returns are not guaranteed and vary by market and period. A cautious approach is to model two or three scenarios rather than a single optimistic figure.

More worked examples

1,000 at 5 percent compounded annually for ten years becomes 1,628.89.
The same 1,000 at 5 percent simple interest for ten years becomes 1,500.
Compounded monthly instead, 1,000 at 5 percent for ten years becomes 1,647.01, slightly more than the annual case.
Saving 200 a month at 5 percent for ten years builds about 31,056, of which 7,056 is growth.

Rule of 72: years to double

Approximate years for an investment to double, using the rule of 72
Annual return	Approximate doubling time
3%	about 24 years
5%	about 14.4 years
7%	about 10.3 years
10%	about 7.2 years

Common mistakes to avoid

Confusing nominal and real returns. A 5 percent return with 3 percent inflation is only about 2 percent in purchasing power.
Ignoring compounding frequency. The same nominal rate paid monthly beats the same rate paid annually.
Assuming a historical average return will repeat in any given decade. Market returns vary widely over short periods.
Overlooking fees. A 1 percent annual fee compounds against you exactly as interest compounds for you.

Further questions

What is the difference between simple and compound interest?

Simple interest is paid only on the original principal. Compound interest is also paid on interest already earned, which is why it grows faster.

What is the rule of 72?

Divide 72 by the annual percentage return to estimate the years needed to double your money. At 6 percent that is about 12 years.

What is the difference between APR and APY?

APR quotes the nominal annual rate without intra-year compounding, while APY includes it, so APY is the higher and more comparable figure.

Does inflation matter for long-term saving?

Enormously. Over decades, even modest inflation erodes purchasing power, which is why real rather than nominal returns are the honest measure.

Assumptions and sources

Projections assume a constant annual return and a constant inflation rate. Real markets do not behave that way, and fees, taxes and changing contribution amounts are not modelled. The inflation-adjusted figure uses the same compounding convention as the nominal balance.