About the Compound Interest Calculator
Compound interest means you earn returns on previous returns, which is why the growth curve bends upward rather than climbing in a straight line. The two levers that matter most are time and regular contributions — a modest monthly deposit started early usually beats a large lump sum started late.
How to use the Compound Interest Calculator
- Enter your starting amount and monthly deposit.
- Set the annual interest rate and how long you will invest.
- Choose how often interest compounds.
- Read the final balance and the year-by-year chart of contributions versus interest.
Why use this tool?
Regular contributions
Models monthly deposits, not just a one-off lump sum, which is how most people actually save.
Contributions vs interest
Each year's bar shows how much you put in against how much the interest added.
Any compounding frequency
Compare yearly, quarterly, monthly and daily compounding on the same inputs.
Frequently asked questions
What is the formula for compound interest?
A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the compounds per year and t the years. Regular deposits add a future-value-of-annuity term on top.
Does compounding frequency matter much?
Less than people expect. At 7% over 20 years, daily versus annual compounding differs by a few percent of the final balance. Rate and time dominate.
Should I adjust for inflation?
For a realistic picture, subtract expected inflation from your rate. A 7% return with 3% inflation is roughly 4% in real purchasing power.