Compound Interest Calculator
Calculate final balance, interest earned and contributions over time.
Overview
The Compound Interest Calculator projects how an initial deposit and optional periodic contributions grow over time at a given annual rate. It returns the final balance, the total interest earned and a breakdown of contributions versus growth, so you can see compounding doing its work.
It is built for savers planning retirement, parents stashing money for college, students learning the time value of money and developers prototyping financial features. Small differences in rate or contribution add up dramatically over a multi-decade horizon — the calculator makes that visible.
How it works
With principal P, annual rate r, compounding n times per year and time t years, the bare-bones future value is FV = P * (1 + r / n)^(n * t). With a periodic contribution PMT made every compounding period, the formula extends to FV = P * (1 + r/n)^(n*t) + PMT * ((1 + r/n)^(n*t) - 1) / (r/n).
The calculator runs the math period-by-period internally rather than as a single closed-form expression, which lets it display a chart and itemise interest each year. Setting n to a huge number approximates continuous compounding P * e^(r * t).
Examples
P=10,000, r=7%, monthly compounding, 30 years, no contributions
→ FV ≈ $81,165 (interest ≈ $71,165)
P=1,000, $200/month, r=6%, monthly, 20 years
→ FV ≈ $95,810 (contributions $49,000, interest $46,810)
P=5,000, r=4%, annual compounding, 10 years
→ FV ≈ $7,401
FAQ
Does compounding frequency matter much?
For typical rates the jump from annual to monthly is meaningful, monthly to daily is small and daily to continuous is tiny. Daily compounding is essentially the practical maximum.
Are contributions made at the start or end of each period?
This tool follows the "annuity-immediate" convention — contributions go in at the end of each period. Many real accounts work this way; some payroll deductions go in earlier.
Does it account for inflation?
No. The output is in nominal dollars at the future date. To see real purchasing power, subtract an inflation rate from your nominal rate.
What about taxes?
Not modelled. For a tax-deferred account (401k, IRA) the gross calculation is what you keep until withdrawal; for a taxable account, deduct annual taxes from the rate.
Is the rate the APR or APY?
Treat the input as APR. The compounding setting handles the conversion to actual effective yield.