📈 Compound Interest Calculator
See how your money grows over time with compound interest and optional monthly contributions.
Investment Details
Your Result
| Year | Contributions | Interest Earned | Balance |
|---|
How the Compound Interest Calculator Works
Compound interest is interest calculated on both your initial principal and the interest that has already accumulated. The more frequently interest compounds, the faster your balance grows.
Formula
P = principal, r = annual rate (decimal), n = compounds per year, t = years
With monthly contributions (compounded monthly at rate r/12):
FV_contributions = PMT × [((1 + r/12)^m − 1) / (r/12)]
m = total number of contribution months
Ending Balance = A + FV_contributions
Frequently Asked Questions
How does compounding frequency affect growth?
More frequent compounding (daily vs. annually) earns slightly more interest because interest is added to the principal more often, letting future interest calculate on a larger base sooner.
How are monthly contributions calculated?
Monthly contributions are modeled as a separate stream that compounds monthly at your annual rate divided by 12, then added to the growth of your initial principal.
Is compound interest better than simple interest?
Yes, over time compound interest grows faster than simple interest because it earns returns on previously earned interest, not just on the original principal.