Compound Interest Calculator
Estimate how your investment grows over time with compounding and monthly contributions. Results update instantly as you type.
Methodology: deterministic formulas based on your inputs only. No account data, no external rates, and no personalized advice.
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Year-by-year breakdown
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What is compound interest?
Compound interest is interest calculated on both your original principal and the interest that accumulates over time. In other words, you earn “interest on interest.” This creates a snowball effect: early gains may look small, but growth often accelerates in later years because the base (your balance) keeps getting bigger.
This calculator helps you estimate that growth using three key inputs: your starting amount (principal), your monthly contribution, and your annual interest rate. It also shows a year-by-year breakdown so you can see how much of the final balance comes from contributions versus interest.
How this compound interest calculator works
We simulate your balance month by month. Each month can include a contribution and an interest step. The Contribution Timing setting controls whether your monthly contribution is added at the start of the month (so it earns interest immediately) or at the end of the month (so it starts earning interest next month).
The Compounds Per Year setting lets you model different compounding frequencies. For example, monthly compounding (12) is common for many savings products, while some products may effectively compound daily (365). A higher compounding frequency can slightly increase the final result at the same nominal annual rate, although the difference is usually small compared to the impact of consistent contributions and time.
Compound interest formula (simple explanation)
The classic compound interest formula for a single lump sum is: A = P (1 + r/n)^(n·t)
Where P is the principal, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. However, real-life saving and investing usually includes recurring deposits (like monthly contributions). That’s why this tool uses a step-by-step monthly projection.
If you want a quick intuition: the earlier money is added, the longer it has to compound. That’s why monthly contributions and time in the market can matter as much as (or more than) small changes in the interest rate.
Example: monthly contributions over time
Imagine you start with a principal of 5,000 and add 100 per month. With a 5% annual rate over 20 years, your balance can grow significantly, and a large portion of that growth may come from interest in the later years. Try switching the contribution timing from End of month to Start of month to see how earning interest one month earlier each time can increase the final amount.
Want a quick sanity check? Set the annual rate to 0%. Your final amount should then be close to your total contributions (principal + all monthly deposits). This is a simple way to verify the contribution math before exploring different rates.
Frequently asked questions
Is “start of month” or “end of month” more realistic?
It depends on how you contribute. If you invest on payday and your deposit effectively enters the account immediately, “start of month” may be closer. If your deposit is processed at the end of the period, “end of month” may be closer. The difference is typically small month-to-month, but it can add up over many years.
Does this include taxes, fees, or inflation?
No. This calculator is a baseline projection. Taxes, fees, and inflation can reduce real-world results. If you want a more conservative estimate, try lowering the annual rate to reflect expected fees and inflation (for example, use a “real return” estimate instead of a nominal return).
Is currency conversion included?
No. The currency selector only changes formatting. If you need true conversion, you can run the same scenario in multiple currencies or later we can add an optional exchange-rate feature.