Compound interest

Compound interest: the basics

Estimate the growth of one starting investment when its return stays invested and earns further returns.

How to use the inputs

• Initial investment: Enter the amount invested at the start.
• Expected annual return: Enter an assumed annual percentage return. It is an illustration, not a promise.
• Investment period: Enter a whole number of years from 1 to 60.

Change an input to update the results. Add up to four scenarios to compare separate assumptions; reset affects only the selected scenario.

Understanding the results

• Estimated future value is the starting investment plus assumed growth.
• Initial investment repeats your starting amount. Estimated returns show the difference between the ending value and that amount.
• The chart shows the value at the start and after each full year.

The formula, in words

Future value = P × (1 + a) raised to Y.

P is the initial investment, R is the annual percentage entered, a = R ÷ 100 is the annual decimal rate, and Y is the number of years.

Estimated returns = future value − P. At 0%, future value remains P.

Assumptions and limits

• The entire initial amount is invested at the beginning. Returns compound once per year and remain invested.
• There are no later contributions, withdrawals or changes in the assumed rate. Rates from 0–50% are supported; negative-return scenarios are not.
• Taxes, fees and inflation are excluded. An account that compounds monthly or quotes a differently defined rate may not match this annual model.

Currency results display whole units; other numbers show at most one decimal place. Calculations keep full precision unless whole units must be rounded up for break-even. Rounded figures may not add up exactly.

Examples below use USD and local number formatting. Country selection changes currency labels, formatting and terminology; it does not convert money or automatically apply local tax or lender rules.

Worked example

This fixed example uses the calculator’s default inputs; it does not change when you edit a scenario. Any example interest or return rate is an assumption, not a guaranteed outcome.

Initial investment

USD 10,000

Expected annual return

7%

Investment period

20 years

Multiply USD 10,000 by (1 + 7 ÷ 100) once per year for 20 years. The resulting USD 38,697 includes the original USD 10,000 plus USD 28,697 of assumed returns.

Estimated future value

USD 38,697

Initial investment

USD 10,000

Estimated returns

USD 28,697

Common questions