Compound Interest Calculator
Calculate compound interest and investment growth
Compound Interest Calculator
Optional: Add regular monthly deposits
Investment Growth
Future Value
$31,817.17
Total Contributions
$22,000.00
Total Interest Earned
$9,817.17
Interest Growth
Interest as percentage of total contributions
Calculation Breakdown:
• Initial investment: $10,000.00
• Monthly contribution: $100.00 × 120 months = $12,000.00
• Interest rate: 5% compounded annually
• Time period: 10 years
• Total contributions: $22,000.00
• Interest earned: $9,817.17
• Final amount: $31,817.17
đź’ˇ Pro Tip:
The power of compound interest grows exponentially over time. Start investing early, contribute regularly, and let time work in your favor. Even small monthly contributions can lead to significant wealth accumulation.
Privacy & Security
All compound interest calculations are performed entirely in your browser using JavaScript. No financial data is sent to any server or stored anywhere. Your investment details, contribution amounts, and calculations remain completely private.
About Compound Interest Calculator
Our free Compound Interest Calculator helps you calculate the future value of your investments by showing how compound interest works over time. Whether you're planning for retirement, saving for a major purchase, or building wealth, this calculator provides accurate projections based on your initial investment, interest rate, time period, and compounding frequency. The calculator supports daily, monthly, quarterly, and annual compounding, and includes optional monthly contributions to show the power of regular investing. Compound interest is often called the "eighth wonder of the world" because it allows your money to grow exponentially over time. Unlike simple interest which is calculated only on the principal amount, compound interest is calculated on both the principal and the accumulated interest from previous periods. This means you earn interest on your interest, creating a snowball effect that can significantly boost your wealth over the long term. Our calculator makes it easy to visualize this growth by showing you the breakdown between your total contributions and the interest earned. You can experiment with different scenarios by adjusting the interest rate, time period, and compounding frequency to see how small changes can have a big impact on your final returns. Whether you're a beginner investor or experienced financial planner, this tool provides the insights you need to make informed investment decisions and set realistic savings goals.
Key Features
Multiple Compounding Frequencies
Choose from daily, monthly, quarterly, or annual compounding to match your investment type
Monthly Contribution Support
Add regular monthly deposits to see how consistent investing accelerates wealth building
Detailed Breakdown
View total contributions, interest earned, and future value with complete calculation details
Visual Progress Bar
Interactive progress bar shows interest as percentage of total contributions at a glance
Real-time Calculations
Results update instantly as you adjust any input parameter for quick scenario testing
Accurate Formulas
Uses standard financial formulas: FV = P(1 + r/n)^(nt) for compound interest and annuity formulas for contributions
Flexible Time Periods
Calculate growth over any time period from 1 year to 50+ years for long-term planning
Investment Growth Summary
See exactly how much of your final amount comes from contributions vs. compound interest
How to Use the Compound Interest Calculator
Enter Initial Principal
Input your starting investment amount in dollars. This is the initial lump sum you're investing.
Set Annual Interest Rate
Enter the expected annual interest rate as a percentage. For stocks, use historical averages like 7-10%; for savings accounts, use 0.5-3%.
Choose Time Period
Specify how many years you plan to let the investment grow. Longer periods show the true power of compounding.
Select Compounding Frequency
Choose how often interest is calculated and added: daily (365x/year), monthly (12x/year), quarterly (4x/year), or annually (1x/year).
Add Monthly Contributions (Optional)
Enter any recurring monthly deposits you plan to make. Even small monthly contributions can dramatically increase your final amount.
Review Results
Check the future value, total contributions, interest earned, and detailed breakdown to understand your investment growth.
Investment & Compounding Tips
- Start Early: Time is your greatest advantage with compound interest. Starting 10 years earlier can more than double your final amount, even with the same total contributions. A 25-year-old investing $200/month until 65 at 7% will have $525,000, while a 35-year-old contributing the same will have only $244,000—less than half!
- Invest Regularly: Consistent monthly contributions often matter more than trying to time the market. Dollar-cost averaging (investing the same amount regularly) reduces risk and ensures you keep contributing during market dips when prices are lower. Automate your investments so you never miss a contribution.
- Reinvest Dividends: Always reinvest dividends and interest to maximize compounding. Many investment accounts offer automatic dividend reinvestment plans (DRIPs). Reinvesting just 2% dividend yields can add 20-30% to your total returns over 30 years.
- Minimize Fees: Investment fees compound negatively. A 1% annual fee doesn't sound like much, but over 30 years it can reduce your returns by 25-30%. Choose low-cost index funds (0.03-0.20% fees) over high-fee managed funds (1-2% fees) when possible.
- Use Tax-Advantaged Accounts: Maximize contributions to 401(k)s, IRAs, and other tax-advantaged accounts. Tax-deferred growth means you're compounding on the full amount without losing 15-30% annually to taxes. This can add hundreds of thousands to your retirement savings.
- Increase Contributions Over Time: Try to increase your monthly contributions by 1-2% each year or whenever you get a raise. A $200/month contribution that increases 3% annually will result in 40% more wealth over 30 years compared to flat $200/month contributions, with minimal impact on your budget.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest which only earns on the principal, compound interest creates exponential growth because you earn "interest on interest." For example, if you invest $1,000 at 5% annually, after one year you have $1,050. In year two, you earn 5% on $1,050 (not just $1,000), giving you $1,102.50. This compounding effect accelerates over time, making it one of the most powerful wealth-building tools available.
How does compounding frequency affect returns?
More frequent compounding generally leads to higher returns because interest is calculated and added to your principal more often. Daily compounding (365 times per year) will yield slightly more than monthly (12 times), which yields more than quarterly (4 times) or annual (1 time) compounding. However, the difference is usually small unless you have a large balance or high interest rate. For example, $10,000 at 5% for 10 years yields $16,288.95 with annual compounding but $16,470.09 with daily compounding—about $181 more.
What's a realistic interest rate to use?
Interest rates vary widely by investment type: High-yield savings accounts: 0.5-5%; Bonds: 2-6%; Stock market historical average: 7-10%; Real estate: 8-12%; Index funds: 7-10%. For conservative planning, use lower estimates. The S&P 500 has averaged about 10% annually over the long term, but individual years can vary significantly. Always account for inflation (typically 2-3%) when evaluating real returns.
How do monthly contributions affect growth?
Regular monthly contributions dramatically accelerate wealth building through dollar-cost averaging and consistent compounding. For example, investing $10,000 initial + $100/month at 7% for 30 years yields $166,338, compared to just $76,123 with no monthly contributions. The $36,000 in contributions generates $90,215 in additional interest! Even small monthly amounts ($25-50) add up significantly over decades.
Can I use this calculator for loans or debt?
Yes, the same compound interest formula applies to debt! Credit cards and loans use compound interest, which is why debt can grow quickly if unpaid. For debt calculations, the "interest earned" represents interest you'll pay, and the "future value" is the total amount owed. Seeing how quickly debt compounds at high rates (15-25% for credit cards) can be a powerful motivator to pay down balances quickly.
What's the difference between this and simple interest?
Simple interest is calculated only on the principal amount: I = P Ă— r Ă— t. Compound interest is calculated on principal plus accumulated interest: A = P(1 + r/n)^(nt). For $10,000 at 5% over 10 years: simple interest yields $15,000 total ($5,000 interest), while compound interest yields $16,289 total ($6,289 interest). The difference grows exponentially with time and higher rates.
How accurate is this calculator?
This calculator uses standard financial formulas and is mathematically accurate for the inputs provided. However, real-world returns fluctuate due to market volatility, economic conditions, fees, taxes, and inflation. Use these calculations as estimates for planning purposes. For conservative planning, consider using slightly lower interest rates than historical averages and account for investment fees (typically 0.5-2% annually for managed funds).
Should I maximize compounding frequency?
While more frequent compounding is theoretically better, the practical difference is often minimal. Focus instead on these bigger factors: higher interest rates (shop for best savings rates or investment returns), longer time periods (start investing early), regular contributions (invest consistently), and lower fees (which compound negatively). A 0.5% fee difference over 30 years has a much bigger impact than daily vs. monthly compounding.
Why Use Our Compound Interest Calculator?
Our compound interest calculator stands out by combining accuracy, flexibility, and ease of use in one powerful tool. Unlike basic calculators, we support multiple compounding frequencies, monthly contributions, and provide detailed breakdowns of exactly where your money is coming from—principal, contributions, or compound interest. The visual progress bar helps you instantly understand the power of compounding, while the real-time calculations let you experiment with different scenarios to find the optimal savings strategy. Whether you're planning for retirement 30 years away or calculating short-term savings growth, our calculator handles all scenarios with precision. Best of all, it's completely free, requires no registration, and performs all calculations in your browser for complete privacy. We've designed this tool to be educational as well as practical—helping you understand not just what your money will grow to, but why compound interest is such a powerful force for building wealth. Use it to set realistic financial goals, compare investment options, or simply visualize the long-term impact of starting to save today versus waiting another year.