Compound Interest Calculator
Calculate how your investments grow over time with compound interest. Enter your principal, interest rate, compounding frequency, and optional monthly contributions to see year-by-year projections.
Investment Details
Results
Breakdown
Year-by-Year Breakdown
| Year | Balance | Total Contributions | Total Interest |
|---|---|---|---|
| 1 | $11,962.16 | $11,200.00 | $762.16 |
| 2 | $14,066.16 | $12,400.00 | $1,666.16 |
| 3 | $16,322.27 | $13,600.00 | $2,722.27 |
| 4 | $18,741.46 | $14,800.00 | $3,941.46 |
| 5 | $21,335.54 | $16,000.00 | $5,335.54 |
| 6 | $24,117.15 | $17,200.00 | $6,917.15 |
| 7 | $27,099.84 | $18,400.00 | $8,699.84 |
| 8 | $30,298.15 | $19,600.00 | $10,698.15 |
| 9 | $33,727.66 | $20,800.00 | $12,927.66 |
| 10 | $37,405.09 | $22,000.00 | $15,405.09 |
How to Use the Compound Interest Calculator
Compound interest is one of the most powerful concepts in finance. It allows your money to grow exponentially by earning interest not only on your initial investment (the principal) but also on the accumulated interest from previous periods.
To use this calculator, enter your starting principal amount, the annual interest rate you expect to earn, how frequently the interest compounds, and the number of years you plan to invest. You can also add an optional monthly contribution to see how regular deposits accelerate your growth.
The formula used is A = P(1 + r/n)^(nt) for the principal, plus the future value of annuity formula for recurring contributions: PMT x (((1 + r/n)^(nt) - 1) / (r/n)). All calculations run entirely in your browser with no data sent to any server.
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Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which is only calculated on the principal, compound interest allows your money to grow exponentially over time as you earn interest on your interest.
How does compounding frequency affect returns?
The more frequently interest is compounded, the more total interest you earn. Monthly compounding yields slightly more than quarterly, which yields more than annual compounding. However, the difference between monthly and daily compounding is relatively small for most interest rates.
What is the compound interest formula?
The compound interest formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of compounding periods per year, and t is the time in years. For regular contributions, the future value of annuity formula is added: PMT x (((1 + r/n)^(nt) - 1) / (r/n)).
How can I maximize compound interest?
To maximize compound interest: start investing as early as possible, choose higher compounding frequencies when available, make regular contributions even if small, reinvest all returns rather than withdrawing them, and seek the highest safe interest rate for your risk tolerance. Time is the most powerful factor in compound growth.