Compound Interest Calculator

How the Compound Interest Calculator Works

The Compound Interest Calculator shows how your money grows over time when interest is reinvested instead of withdrawn. It uses your starting balance, periodic contributions, annual interest rate, compounding frequency, and time horizon to calculate your final balance, total contributions, and total interest earned. By adjusting these inputs, you can instantly see how small changes in rate, time, or deposits impact long-term results.

Core Compound Interest Formula

For a single lump sum with no additional contributions, the classic compound interest formula is:

A = P × (1 + r / n)^{n × t}

where:

• P = initial principal (starting amount)
• r = annual interest rate (as a decimal)
• n = number of compounding periods per year
• t = time in years
• A = accumulated amount after t years

When you include recurring contributions (monthly, yearly, etc.), the calculator adds a standard annuity formula on top of this core growth formula so both your initial deposit and ongoing deposits compound together.

Compounding Frequency & Contribution Timing

The calculator lets you choose common compounding schedules such as annually, semiannually, quarterly, monthly, weekly, or daily. A higher compounding frequency means interest is added more often, which slightly increases growth for the same nominal rate. You can also specify how often you contribute (monthly, yearly, or none). The tool assumes contributions happen at consistent intervals and applies them in sync with your selected schedule.

What the Results Tell You

After you enter your values and compounding settings, the calculator displays:

• Final balance: the total value of your investment at the end of the period.
• Total contributions: the sum of your initial deposit plus all recurring deposits.
• Total interest earned: how much growth came from compounding rather than new money you added.

Many implementations also include an amortization-style table or timeline that shows how your balance grows year by year, which helps visualize the accelerating effect of compound interest.

Practical Ways to Use This Calculator

The Compound Interest Calculator is useful for a wide range of savings and investing questions, including:

• Estimating how much your savings account, CD, or brokerage account could grow over time.
• Testing different monthly contribution amounts to hit a target goal.
• Comparing two interest rates or compounding frequencies on an equal basis.
• Showing students or clients how “interest on interest” accelerates growth in later years.

Scope, Assumptions & Limitations

To keep the math clear and the interface predictable, this calculator makes a few intentional simplifications:

• Uses a fixed annual interest rate; it does not simulate changing market returns.
• Assumes contributions are made on time and in full at the chosen interval.
• Does not include taxes, fees, inflation adjustments, or early withdrawal penalties unless you manually factor them into your rate.
• Designed for education and planning, not as personalized investment advice or a guarantee of future performance.

Educational Insight

Compound interest is often called the “eighth wonder of the world” because of how dramatically it rewards consistency and time. By separating total contributions from total interest and letting you experiment with rate, horizon, and contribution scenarios, this Compound Interest Calculator helps you see exactly how long-term investing works—and how even modest, steady deposits can grow into something substantial.