About the Compound Interest Calculator
This Compound Interest Calculator shows how money can grow when returns are earned on both the original principal and on accumulated interest. By adjusting your initial deposit, annual interest rate, compounding frequency, and optional recurring contributions, you can project a future value over any time horizon. It’s a versatile tool for savings goals, long-term investing, and understanding the mathematics of exponential growth.
Compounding frequency—annual, semiannual, quarterly, monthly, or daily—affects how quickly balances grow at a given rate. More frequent compounding generally increases the ending value slightly. Adding periodic contributions (monthly or per-compound) can accelerate progress even more, especially over longer durations. Use this calculator to experiment with rates and timelines to see how small changes can have a big impact over decades.
Keep expectations realistic: market returns fluctuate, and results vary after fees and taxes. Consider using a range of return assumptions and review your plan regularly. This tool provides educational estimates to help you plan, compare scenarios, and set achievable financial targets.
Key features
- Future value projection with adjustable compounding frequency
- Optional contributions per period to simulate recurring savings
- Breakdown emphasis on the power of time and rate on growth
- Useful for savings goals, retirement planning, and education funds
- Scenario testing for conservative to aggressive return assumptions
How to use
- Enter your starting principal.
- Provide the annual interest rate.
- Set years and compounds per year.
- Optionally add a contribution per period.
- Review the future value and total interest.
Formula
FV = P(1 + r/m)m·t + C × \[((1 + r/m)m·t − 1) / (r/m)\]
Variables
| Symbol | Meaning |
|---|---|
| P | Initial principal |
| r | Annual interest rate (decimal) |
| m | Compounds per year |
| t | Time in years |
| C | Contribution per period |
Examples
- A $2,000 principal at 6% compounded monthly for 15 years grows more than with annual compounding at the same rate.
- Adding $100 per month over 20 years meaningfully increases the final corpus due to contributions plus compounding.
- Extending the time horizon from 10 to 20 years can more than double outcomes even at the same rate.
- Starting early—even with small amounts—lets compounding do most of the heavy lifting.
Tips
- Use realistic rates reflective of your chosen assets and net of fees.
- Give compounding time; consistency over years matters more than short spurts.
- Consider tax impacts and use tax-advantaged accounts where available.
- Revisit assumptions annually and adjust contributions with income growth.
- Diversify to balance risk and potential return across market cycles.