Compound Interest Calculator
Model investment and savings growth with compound interest, regular contributions, tax on gains, and inflation adjustment. See your true after-tax, real-dollar balance year by year.
How to use this calculator
Enter your initial investment, annual interest rate, investment period, and optionally a monthly contribution. Choose how frequently interest is compounded — monthly is standard for most accounts.
For a more realistic picture, add a tax rate (applied to each year's interest before it continues compounding) and an inflation rate (used to convert the nominal balance into today's purchasing power equivalent). The results and growth table update to show all four views: gross, after-tax, real, and real after-tax.
How are tax and inflation applied?
The calculator runs a year-by-year simulation. Each year:
This means tax reduces the amount that continues compounding each year — accurately modelling a taxable account. The real balance converts your nominal balance into today's dollars so you can see true purchasing power, not just a nominal number inflated by years of price rises.
Frequently Asked Questions
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What is compound interest?
Compound interest is interest calculated on both the initial principal and all previously earned interest. Unlike simple interest — which earns only on the original amount — compound interest grows exponentially. Starting earlier matters enormously: 10 years of extra compounding can more than double a final balance.
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Does this calculator account for taxes?
Yes. Enter your tax rate and each year's interest is reduced by that percentage before it is added to your balance. This means less interest continues compounding — accurately reflecting a taxable brokerage or savings account. Set the tax rate to 0% to model a tax-advantaged account such as a Roth IRA or ISA.
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How does inflation affect the results?
Inflation erodes purchasing power over time. A balance of $100,000 in 20 years at 3% inflation is only worth about $55,000 in today's dollars. Enter your expected inflation rate and the "Real Balance" result — and the real column in the growth table — show your balance expressed in today's purchasing power so you can set realistic goals.
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What is the Rule of 72?
Divide 72 by your annual gross interest rate to estimate how many years it takes to double your money. At 7% it takes roughly 10.3 years (72 ÷ 7). Note that taxes and inflation will extend the real doubling time — the calculator shows the gross Rule of 72 figure as a quick reference.
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What compounding frequency should I use?
Use the frequency that matches your actual account. Most high-yield savings accounts compound daily or monthly. Investment accounts (stocks, ETFs) effectively compound continuously, but monthly is a good approximation. The difference between daily and monthly compounding is usually less than 0.1% per year at typical rates.
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Is my data kept private?
Yes — all calculations run entirely in your browser using JavaScript. Nothing you enter is sent to any server or stored anywhere. See our Privacy Policy for details.
Methodology & Limitations
This model applies the entered nominal annual rate and compounding frequency, then adds monthly contributions as an annual total at the end of each simulated year. Tax is an illustrative percentage of each year's calculated interest; inflation converts the resulting nominal balance into an estimated value in today's purchasing power.
Limitations: Results are estimates for planning, not investment, tax, or financial advice. Actual returns, timing of deposits, taxes, fees, inflation, and account rules can differ.
Source: U.S. Securities and Exchange Commission: Compound Interest Calculator.
Prepared and reviewed by MonkeyTactics. Last reviewed .