Compound Interest Calculator
See how savings grow with compound interest.
Results update as you type.
This calculator is for illustrative purposes only. Actual rates, fees and terms vary by lender. Consult a qualified financial adviser before making borrowing decisions.
How it works
Compound interest is the growth you earn when interest is added back to your balance and then earns interest of its own, so the account grows faster the longer it runs. The future value shown here is the projected balance once that snowball effect has compounded your initial deposit and every monthly contribution to the end of the period. Understanding it matters because compounding is the single largest driver of long-term wealth, and small differences in rate, time or contribution size lead to strikingly different outcomes. This compound interest calculator applies the exponential growth factor to your starting amount at the frequency you choose, then adds the future value of your contribution stream, treated as a series of monthly deposits. The exponential formula is used because each period multiplies the whole balance — principal plus all prior interest — by the same growth factor, which is precisely what compounding means. Savers, investors and financial planners lean on a compound interest calculator to set retirement targets, weigh a lump sum against steady contributions, and see why starting early beats contributing more later. Because it assumes a constant return, treat the projection from any compound interest calculator as a planning estimate rather than a promise; real markets rise and fall year to year.
FV = P(1 + r/n)^(nt) + PMT × [((1 + i)^m − 1) ÷ i]
P is the starting principal, r the annual rate, n the compounds per year and t the years, so (1 + r/n)^(nt) is the growth factor applied once per period. Raising it to the total number of periods captures interest repeatedly earning interest. The contribution term sums each monthly deposit's own growth as a geometric series, dividing by the periodic rate i to total every deposit compounded to the end date.
Source:U.S. SEC — Investor.gov
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter initial amount, annual interest rate and years.
- 2
Adjust the options
Adjust monthly contribution and compounding if they apply — sensible defaults are already set.
- 3
Read your result
Future value updates instantly as you type — no button to press.
Frequently asked questions
How is compound interest calculated?
The balance is multiplied by a growth factor each period rather than earning a flat amount. For the initial deposit, that factor is (1 + r/n) applied nt times, where r is the annual rate, n the compounds per year and t the years. Regular contributions are handled as a separate annuity and added on. Because each period grows the whole balance, interest earned earlier itself earns interest, which is the compounding effect.
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal, so it grows in a straight line. Compound interest is charged on the principal plus all interest already added, so growth accelerates over time. On a 20-year horizon the gap is enormous: compounding at 7% roughly quadruples a lump sum, while simple interest at the same rate only about doubles it. Longer periods widen the difference.
Does compounding frequency really matter?
It helps, but less than people expect. Moving from annual to monthly compounding at a typical rate adds only a fraction of a percent to the effective yield, because the extra credits are small. Time in the market and the contribution amount dominate the outcome. Compare accounts by their APY, which already bakes in the compounding frequency, rather than the stated nominal rate alone.
How can I reach a savings goal faster?
Three levers move the future value: contribute more each month, earn a higher rate, or give the money more time. Time is usually the most powerful because it multiplies every contribution's compounding. Increasing the monthly deposit has a direct, predictable effect, while chasing a higher rate adds risk. Front-loading contributions early in the period also beats adding the same money later.
Are these projections guaranteed?
No. The calculator assumes a single, constant rate of return for the whole period, but real investments fluctuate and can lose value in any given year. Use it to compare scenarios and set targets, not as a promise of a specific balance. For volatile assets, run a conservative and an optimistic rate to bracket the likely range rather than trusting one figure.