Compound Interest Calculator
See how an investment grows over time with compounding and regular contributions.
Compound Interest Calculator
See how an investment grows over time with compounding and regular contributions.
Starts in your browser. Instructions are below.
How to use Compound Interest Calculator
- 01Enter your starting amount, annual interest rate and the number of years.
- 02Add a regular contribution if you plan to keep paying in.
- 03Choose how often interest compounds and read the growth table and total interest earned.
About Compound Interest Calculator
Compound interest is calculated with A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years. Regular contributions are added period by period on top of that.
Compounding frequency has a smaller effect than people expect: at 6 percent, monthly compounding beats annual by roughly a sixth of a percentage point a year. Time in the market and contribution size matter far more.
The figures are a projection, not a forecast. Real investment returns vary year to year, and this model assumes a steady rate throughout.
Worked example: $10,000 at 5%
Here is $10,000 left alone at 5% a year, with no deposits, under simple interest, yearly compounding and monthly compounding.
| Years | Simple interest | Compounded yearly | Compounded monthly |
|---|---|---|---|
| 1 | $10,500.00 | $10,500.00 | $10,511.62 |
| 10 | $15,000.00 | $16,288.95 | $16,470.09 |
| 20 | $20,000.00 | $26,532.98 | $27,126.40 |
| 30 | $25,000.00 | $43,219.42 | $44,677.44 |
The gap is small in year one and huge by year 30. Compounding frequency matters far less than time: monthly beats yearly by about $1,458 after 30 years, while 30 years beats 10 years by more than $27,000.
Adding regular deposits
Start with $5,000, add $200 each month and earn 7% compounded monthly. After 20 years you have about $124,379, of which $53,000 is your own money and the rest is interest. The calculator adds each deposit at the end of its period, which is how most savings plans work.
Formula and rule of 72
Future value = P × (1 + r/n)^(n × t), where P is the starting amount, r the yearly rate, n the number of compounding periods per year and t the number of years. For a quick estimate, divide 72 by the rate to get the years needed to double: at 6% that is 12 years, close to the exact 11.9.
Common mistakes
- Using a stock market average as a guaranteed rate. Real returns vary year to year.
- Ignoring inflation. At 3% inflation, $44,677 in 30 years buys about what $18,400 buys today.
- Ignoring fees and taxes, which come out of the rate you actually earn.
Frequently asked questions
- What is the compound interest formula?
- A = P(1 + r/n)^(nt) , principal, annual rate, compounds per year, and years.
- Does compounding frequency matter much?
- A little. Monthly beats annual by a fraction of a percent a year at typical rates.
- Are returns guaranteed?
- No. This is a projection using a fixed rate, not a prediction of actual investment performance.
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