Compound Interest Calculator
Project savings growth with compound interest and regular contributions.
See how an investment grows when interest earns interest. Enter a starting amount, an optional regular contribution, a rate, and a time horizon, and the calculator shows your projected balance, total contributions, and interest earned.
Compounding is the engine behind long-term saving: the earlier you start, the more of your final balance comes from growth rather than deposits.
How compounding works
With compound interest, each period's interest is added to the balance, so the next period earns interest on a larger amount. Over a long horizon this snowballs. The classic formula for a lump sum is A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the compounding periods per year, and t the years. Regular contributions add a second growing stream on top.
What moves the result most
Three inputs dominate: time, rate, and contributions. Time is the most powerful because compounding accelerates — a decade added at the start is worth far more than one added at the end. Try lengthening the horizon and watch how the share labelled "interest earned" grows relative to what you put in.
The cost of starting late
Compounding rewards time more than any other input, which is why starting early is so powerful. Someone who invests for thirty years ends up with a balance dominated by growth, not deposits; someone who starts the same plan ten years later has to contribute far more each month to catch up — and often can't. Try shifting the years field up and down here and watch the "interest earned" line swing dramatically. The lesson is consistent: modest amounts invested early tend to beat larger amounts invested late.
Why compounding frequency matters
The same annual rate produces different results depending on how often interest is added. Interest compounded monthly is calculated and credited twelve times a year, and each of those additions starts earning on its own the following month. Compounded annually, the credit happens just once. The difference is small at first and grows with time and rate, which is why deposit accounts advertise both a nominal rate and an effective annual rate that bakes the frequency in.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all previously earned interest, so it grows faster over time.
Does compounding frequency matter?
Yes, but modestly. More frequent compounding (daily vs annually) gives a slightly higher result at the same rate. Time and rate matter far more.
Is this a guaranteed projection?
No. It assumes a fixed rate for illustration. Real returns vary, and this tool is for education, not financial advice.
What is the rule of 72?
A shortcut for compounding: divide 72 by the annual interest rate to estimate the years to double your money. At 8%, that's about 9 years. It's approximate but handy for quick mental checks.
Are real investment returns this smooth?
No. This calculator assumes a steady rate for illustration. Real markets rise and fall year to year, so treat the projection as a guide, not a guarantee, and not as financial advice.
Is more frequent compounding always better for savers?
For money you're saving, yes — more frequent compounding earns slightly more. For money you owe, the reverse is true, since interest is added to your balance more often.
Last updated: 2026-01-15