Compound Interest Calculator
Model how compounding grows your money over time.
Inputs
$
$
%
yrs
Result
Future Value$300,850.72
Total Contributions$130,000.00
Interest Earned$170,850.72
About the Compound Interest Calculator
The Compound Interest Calculator shows how money grows when returns are reinvested, with an optional monthly contribution. Compounding is the reason time in the market beats timing the market.
Calculation method
Uses the standard compound interest formula with periodic contributions. Interest is earned on both principal and previously earned interest.
FV = P(1+r/m)^(mt) + PMT × ((1+r/m)^(mt) − 1)/(r/m)How to use this calculator
- Enter the starting principal and any monthly contribution.
- Enter the annual interest or return rate.
- Enter the time in years — long horizons dramatically increase results.
Example
$5,000 with $200/month at 8% for 30 years grows to roughly $346,000. The same amount at 4% grows to just $175,000 — small rate differences matter enormously over decades.
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 principal plus accumulated interest, producing exponential growth.
How often should interest compound?
More frequent compounding gives slightly higher growth. Daily compounding is common in savings accounts; monthly is standard in investment projections.
What is the rule of 72?
Divide 72 by the annual return to estimate how many years it takes for money to double. At 8%, doubling takes about 9 years.
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for decisions specific to your situation.