See how your money grows over time with the power of compounding. Add monthly contributions to maximise your results.
Compound interest in the US is most commonly expressed as APY (Annual Percentage Yield) — the effective annual rate after intra-year compounding, calculated as APY = (1 + r/n)^n − 1. Tax-advantaged accounts (401(k), IRA, Roth IRA, HSA) compound tax-deferred or tax-free. IRS publishes annual contribution limits each November.
The US tax code creates four very different compounding regimes, and the same contributed dollar grows at materially different rates in each. Taxable brokerage accounts pay tax on dividends annually (qualified: 0%/15%/20%; ordinary: marginal rate) and capital gains on realisation, creating a 0.5-1.5% annual tax drag. Tax-deferred accounts (Traditional 401(k), Traditional IRA) reduce current taxable income and grow untaxed until withdrawal. Tax-free accounts (Roth IRA, Roth 401(k)) take after-tax money in and return tax-free qualified withdrawals. Health Savings Accounts (HSAs) are triple-tax-advantaged when paired with a High-Deductible Health Plan: deductible in, tax-free growth, tax-free out for qualified medical.
The compound interest formula with monthly contributions is FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) ÷ (r/n)]. This calculator runs monthly compounding by default — the US market convention for savings accounts (APY), money market funds, CDs, and most brokerage statements.
Historic US equity returns (S&P 500, 1926-2023): approximately 10% nominal, 7% real (CPI-adjusted). Treasury bills: 3-4% nominal, 0-1% real. A balanced 60/40 portfolio: roughly 8% nominal, 5% real. The calculator's real-return toggle uses the BLS CPI series to strip inflation so terminal values are expressed in today's purchasing power.
Three operational considerations the calculator handles: 1. Roth vs. Traditional break-even — depends on current marginal rate vs. expected retirement rate; the calculator solves for the indifference point 2. APR vs. APY distinction — APR understates true compounding return; this matters most on CDs and money markets 3. Required Minimum Distributions (RMDs) beginning at age 73 under SECURE 2.0, rising to 75 by 2033
For current contribution limits and rules, IRS Publication 590-A (IRAs) and Publication 560 (Retirement Plans for Small Business) are authoritative, with annual COLA limits published each November.
| Year | Balance | Interest This Year | Total Contributions |
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This calculator implements the standard compound-interest formula: A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]. Region-specific tax and rate defaults are sourced directly from each country's primary government source and reviewed against the publication date below.
Last verified: May 2026.