Compound Interest Calculator
Calculate investment growth with compound interest and monthly contributions.
Final Balance
$37,405
Total Interest
$15,405
Total Invested
$22,000
Growth Over Time
Y1
$11,962
Y2
$14,066
Y3
$16,322
Y4
$18,741
Y5
$21,336
Y6
$24,117
Y7
$27,100
Y8
$30,298
Y9
$33,728
Y10
$37,405
ContributionsInterest
Compound Interest Calculator — What It Does
Enter a starting principal, annual interest rate, compounding frequency, investment period, and optional monthly contribution. The calculator shows your final balance, total contributions, and total interest earned — plus a year-by-year growth chart so you can see compounding in action.
The Compound Interest Formula
Without contributions:
The Power of Starting Early
With monthly contributions:
Common Mistakes
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 only earns on principal), compounding causes exponential growth over time.
- What is the compound interest formula?
- A = P(1 + r/n)^(nt), where P is principal, r is annual interest rate (decimal), n is compounding frequency per year, t is years. With regular contributions (PMT): A = P(1+r/n)^(nt) + PMT × [((1+r/n)^(nt) − 1) / (r/n)].
- How often should interest compound for maximum growth?
- More frequent compounding means slightly more growth: annually < quarterly < monthly < daily < continuously. However, the difference between daily and monthly compounding is negligible for most scenarios. The interest rate matters far more than compounding frequency.
- What is the Rule of 72?
- The Rule of 72 is a quick mental math trick: divide 72 by the annual interest rate to estimate how many years it takes for an investment to double. At 6% annual return, money doubles in roughly 72 ÷ 6 = 12 years.
- Should I account for inflation in my calculations?
- For long-term projections, yes. To get the real return, subtract the inflation rate from your nominal rate. If your investment returns 7% but inflation is 3%, your real purchasing power grows at roughly 4% per year.