Compound Interest Calculator
Calculate compound interest growth with monthly contributions. See your money grow over time.
About Compound Interest Calculator
See how your savings grow with compound interest and regular contributions. Includes year-by-year breakdown and Rule of 72.
About this calculator
Compound interest is interest earned on interest. Each period the interest you have already earned is added to the balance, and the next period's interest is calculated on that larger amount. Over short spans it looks modest. Over decades it becomes the biggest part of the story.
This calculator takes an opening deposit, a monthly contribution, a rate, a compounding frequency and a period, and shows the final balance, the interest earned, the total you put in and the return on investment. A year-by-year table shows how the balance, your contributions and the interest each grow, so you can see the point where interest overtakes deposits. Amounts are in dollars, but the maths is identical for any currency.
How to use it
- Enter the Initial Investment you start with.
- Enter the Monthly Contribution you will add each month. Use 0 for a one-time deposit.
- Enter the Annual Interest Rate and choose how often it compounds.
- Enter the Investment Period in years and press Calculate Growth.
- Read the four summary figures and scan the year-by-year table.
The formula behind it
For a lump sum: A = P × (1 + r/n)n·t, where P is the deposit, r the annual rate, n the compounding periods per year and t the years.
Monthly contributions form an annuity: FV = PMT × [((1 + i)N − 1) ÷ i] with i the monthly rate and N the number of months. The tool adds the two parts together.
Worked example
$5,000 plus $200 a month at 8%, compounded monthly for 20 years
| Initial $5,000 grows to | $24,634 |
| $200 a month grows to | $117,804 |
| Final balance | $142,438 |
| Total you contributed | $53,000 |
| Interest earned | $89,438 |
You deposited $53,000 and interest supplied the other $89,438, which is 63% of the final balance.
Tips and common mistakes
- Time matters more than amount. Starting ten years earlier usually beats doubling your contribution.
- Check whether the rate you enter is nominal or an effective annual yield. They differ when compounding is frequent.
- Taxes and fees are not included. Subtract them from the rate if you want a take-home view.
- Raising the contribution each year, even by a small amount, adds a surprising amount to the end figure.
- Compounding frequency matters less than rate and time. Monthly versus daily changes the result by a few tenths of a percent.
Frequently asked questions
What is 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 interest earned so far, so growth accelerates.
Does compounding more often earn more?
Yes, slightly. At 8%, annual compounding gives an effective 8.00%, monthly gives 8.30% and daily gives 8.33%. The gain flattens quickly.
How is the return on investment calculated?
It is interest earned divided by total contributions. In the example, 89,438 ÷ 53,000 gives 169%.
Are contributions made at the start or end of the month?
The tool treats contributions as end-of-month deposits, which is the conservative assumption.
Can I use it for loans?
It models growth of savings. For borrowing costs use the EMI or loan calculators.
Is the result guaranteed?
Only for fixed-rate products such as deposits. For market investments the rate is an assumption, not a promise.