Compound Interest Calculator
Project how a balance grows with compound interest and monthly contributions — see your contributions versus the growth they earn, year by year.
Example values are shown — change any of them and the answer updates live.
What is compound interest?
Compound interest is interest earned on both the original principal and the interest already accumulated. Each period, the interest is added to the balance, and the next period's interest is calculated on the larger amount — so the account grows at an accelerating rate. For example, $1,000 at 5% annually becomes $1,050 after one year, then $1,102.50 the next year: the extra $2.50 is interest on interest.
How compounding frequency works
The more often interest is compounded, the more it grows, because interest starts earning interest sooner. 6% compounded monthly has an effective annual yield (APY) of 6.17%, while 6% compounded daily reaches 6.18% and continuous compounding 6.18%. The effective APY is shown with your results for the frequency you choose.
The formulas
Balance with periodic compounding: A = P(1 + r/n)^(nt) + C·((1 + r/n)^(nt) − 1)/(r/n), where P is the principal, r the annual rate, n compounding periods per year, t years, and C the periodic contribution (multiplied by (1 + r/n) when contributions are made at the beginning of each period). Continuous compounding: A = P·e^(rt).
The Rule of 72
The Rule of 72 estimates how long an investment takes to double: divide 72 by the annual interest rate. At 7%, doubling takes about 10.3 years; at 9%, about 8 years. It is an approximation that becomes less accurate at very low or very high rates.
Beginning vs end of period
If you contribute at the beginning of each period, every contribution earns one extra period of interest compared with contributing at the end. Over decades this difference compounds into a meaningful amount — switch the setting to see it in the projection.
Tax and inflation
The optional tax rate subtracts tax from the interest earned each year (principal and contributions are not taxed; tax rules vary by jurisdiction and account type). The inflation rate converts the future balance into today's purchasing power — a balance worth $100,000 in 20 years at 3% inflation buys what about $55,400 buys today.
Limitations
This calculator is illustrative. It assumes a constant interest rate, constant contributions, and no fees. Real returns vary, investments can lose value, and past performance does not guarantee future results. Consult a licensed professional for decisions.
Sources
Standard calendar arithmetic (Gregorian calendar); no external data.
Estimates under the stated assumptions, for illustration — not financial advice.