Compound Interest Calculator
Our Compound Interest Calculator shows you exactly how your money can grow when interest is reinvested. Enter your principal, rate, time, and compounding frequency to see projected balances, total interest earned, and a year-by-year breakdown.
Your inputs
Projected growth
- Future value
- $144,573
- Total contributed
- $58,000
- Interest earned
- $86,573
Year-by-year balance
- Y1$13,201
- Y2$16,634
- Y3$20,315
- Y4$24,262
- Y5$28,495
- Y6$33,033
- Y7$37,900
- Y8$43,118
- Y9$48,714
- Y10$54,714
- Y11$61,147
- Y12$68,046
- Y13$75,444
- Y14$83,376
- Y15$91,882
- Y16$101,003
- Y17$110,783
- Y18$121,270
- Y19$132,515
- Y20$144,573
How to use this calculator
- 1
Enter your initial investment
Input the starting amount of money you want to invest.
- 2
Set the annual interest rate
Enter the expected annual percentage yield (APY).
- 3
Choose the time horizon
Select how many years you plan to let the money grow.
- 4
Add monthly contributions
Optionally add a recurring monthly deposit to accelerate growth.
- 5
Review your results
See your projected balance, total contributions, and interest earned.
The compound interest formula
This formula calculates the future value of an investment with regular contributions and compound interest.
A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]- A
- Final amount (future value)
- P
- Initial principal balance
- r
- Annual interest rate (decimal)
- n
- Number of compounding periods per year
- t
- Number of years
- PMT
- Monthly contribution amount
Frequently asked questions about Compound Interest Calculator
- What is compound interest?
- Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It causes savings or investments to grow faster than simple interest.
- How often should interest be compounded?
- The more frequently interest is compounded, the more you earn. Daily compounding yields slightly more than monthly, which yields more than annually.
- How is compound interest calculated?
- Compound interest is calculated using the principal amount, annual interest rate, compounding frequency, and investment period. Interest is added back to the balance each compounding period.
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the original principal, while compound interest earns interest on both the principal and previously earned interest.
- Does compounding frequency really matter?
- Yes. More frequent compounding results in slightly higher returns because interest is added to the balance more often.
- Can I include monthly contributions?
- Yes. Regular monthly or yearly contributions significantly increase your investment growth due to compounding over time.
- What is the Rule of 72?
- The Rule of 72 estimates how long it takes for an investment to double. Divide 72 by the annual interest rate to estimate the number of years.
- What investments use compound interest?
- Savings accounts, certificates of deposit (CDs), retirement accounts, mutual funds, and many long-term investments benefit from compound growth.
- How long should I invest to maximize compound interest?
- The longer your money remains invested, the more powerful compound interest becomes because each year's earnings generate additional earnings.
- What annual return should I expect?
- Returns depend on the investment. Savings accounts often earn under 5%, while diversified stock market investments have historically averaged around 7–10% annually before inflation.
- Does inflation affect compound interest?
- Yes. Inflation reduces purchasing power, so your real investment growth equals your investment return minus inflation.
- Why should I start investing early?
- Starting early gives compound interest more time to work, often resulting in much larger balances even if you contribute less overall.