Compound Interest Calculator
See how an investment grows over time. Results update as you type — nothing is sent to a server.
What is compound interest?
Compound interest is interest earned on both your original money and on the interest already added. Because each period's interest joins the balance, growth accelerates over time — this is the "snowball" effect that makes long-term saving powerful.
How is compound interest calculated?
For a lump sum the future value is:
A = P (1 + r/n)^(n·t)
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. When you add a regular deposit, each contribution compounds for the remaining time and the deposits are summed using the future-value-of-an-annuity formula.
Worked example: $10,000 at 5% for 10 years
With monthly compounding, A = 10000 × (1 + 0.05/12)^(12×10) ≈ $16,470, so about $6,470 of interest. Adding $100 a month would push the balance well above $30,000 over the same period.
| Year | Balance (no deposits) |
|---|---|
| 1 | $10,512 |
| 5 | $12,834 |
| 10 | $16,470 |
Making compound interest work for you
Three levers matter most: start early (time is the biggest multiplier), contribute regularly, and let the balance compound as often as possible. Even small monthly deposits add up dramatically over decades.
FAQ
Does compounding frequency really matter?
It helps, but only slightly. Going from annual to monthly compounding at 5% adds a fraction of a percent to the effective rate. Rate and time matter far more.
Are the deposits added at the start or end of the month?
This calculator adds each deposit at the end of the period, which is the conservative, standard assumption.