Compound Interest Calculator
See how your money grows over time with compound interest and regular monthly contributions. Adjust the rate, term, and compounding frequency to plan your savings and investments.
Your Investment
Interest is compounded at the selected frequency; each month earns an equivalent effective rate. Contributions are made monthly.
Results
Monthly compoundingYear-by-Year Breakdown
| Year | Starting Balance | Contributions | Interest Earned | Ending Balance |
|---|
How compound interest works
Compound interest is the process of earning interest not only on your original principal, but also on the interest that principal has already accrued. Each compounding period, the new interest is calculated on a slightly larger balance, so your money grows at an accelerating rate. Albert Einstein is often credited with calling compound interest "the eighth wonder of the world" — adding that "he who understands it, earns it; he who doesn't, pays it."
A = P (1 + r/n)n·t
Where P is the starting principal, r the annual interest rate (as a decimal), n the number of compounding periods per year, and t the number of years. A is the final amount. This calculator extends that idea by adding recurring monthly contributions, which are grown using the equivalent monthly effective rate (1 + r/n)n/12 − 1 so the chosen compounding frequency stays consistent month to month.
The compound interest formula, explained
The expression P(1 + r/n)n·t shows two levers that amplify growth. The exponent n·t is the total number of compounding periods, so both a higher frequency (n) and a longer time horizon (t) increase it. The base (1 + r/n) is the growth factor per period; raising it to the power of every period is what produces the characteristic upward curve of compound growth rather than the straight line of simple interest.
How compounding frequency affects growth
The more often interest is compounded, the faster your balance grows — because each new period starts from a balance that already includes freshly credited interest. Over short horizons the difference is small, but over decades it compounds into a meaningful gap.
- Annually — interest credited once per year; the slowest growth.
- Quarterly / Monthly — the standard for most savings accounts and CDs.
- Daily — close to continuous compounding; the fastest practical growth.
Switch the frequency dropdown above and watch the final balance and chart update instantly to compare.
Tips to make compound interest work for you
- Start early. Time is the most powerful factor in the formula. Money invested in your 20s can grow far more than a larger sum invested in your 40s.
- Automate contributions. A fixed monthly deposit turns time into a growth engine and removes the temptation to time the market.
- Reinvest, don't withdraw. Interest only compounds if you leave it in place. Taking earnings out breaks the compounding chain.
- Mind the rate — and the fees. A 1% difference in annual return can mean tens of thousands of dollars over 30 years, so compare accounts and watch for hidden fees.
How accurate is this calculator?
Calculations run entirely in your browser using standard finance formulas — no data leaves your device. The model assumes a constant interest rate and a fixed monthly contribution for the full term, which is idealised but useful for forecasting. Real-world returns fluctuate, so treat the result as a planning estimate rather than a guarantee. All values are saved locally so you can return and pick up where you left off.