Compound Interest Calculator
Estimate how your savings or investments grow over time. Add monthly contributions, choose a compounding frequency, and see future value, total interest, effective annual rate and annualized return.
Results
- Future value
- $145,180
- Total contributed
- $58,000
- Total interest earned
- $87,180
- Effective annual rate
- 7.23%
- Annualized return (money-weighted)
- 7.23%
Show year-by-year breakdown
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| 1 | $12,400 | $816 | $13,216 |
| 2 | $14,800 | $1,864 | $16,664 |
| 3 | $17,200 | $3,162 | $20,362 |
| 4 | $19,600 | $4,727 | $24,327 |
| 5 | $22,000 | $6,578 | $28,578 |
| 6 | $24,400 | $8,737 | $33,137 |
| 7 | $26,800 | $11,226 | $38,026 |
| 8 | $29,200 | $14,068 | $43,268 |
| 9 | $31,600 | $17,288 | $48,888 |
| 10 | $34,000 | $20,916 | $54,916 |
| 11 | $36,400 | $24,978 | $61,378 |
| 12 | $38,800 | $29,508 | $68,308 |
| 13 | $41,200 | $34,539 | $75,739 |
| 14 | $43,600 | $40,108 | $83,708 |
| 15 | $46,000 | $46,252 | $92,252 |
| 16 | $48,400 | $53,014 | $101,414 |
| 17 | $50,800 | $60,438 | $111,238 |
| 18 | $53,200 | $68,572 | $121,772 |
| 19 | $55,600 | $77,468 | $133,068 |
| 20 | $58,000 | $87,180 | $145,180 |
Disclaimer
This calculator is for educational and illustrative purposes only. It does not constitute financial, investment, tax, or legal advice, and results are estimates that do not account for fees, taxes, inflation, or market risk. Past or projected performance is not a guarantee of future results.
What is Compound Interest?
Compound interest is interest earned on both your original principal and on the interest that has already accumulated. Because interest is continually added back to the balance, growth accelerates the longer money stays invested — often described as "interest on interest." The standard formula for a lump sum with no further contributions is shown below, where A is the future value, 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 number of years.
When you add regular monthly contributions, this calculator simulates the balance month by month — adding each contribution before applying that month's growth — rather than relying on the lump-sum formula alone.
How to Use This Calculator
Enter your initial investment and, if you plan to keep contributing, a monthly contribution amount. Set the annual interest rate you expect and the number of years you plan to stay invested, then choose how often interest compounds and which currency to display results in. The Future Value, Total Contributed, and Total Interest Earned figures update automatically as you adjust any field. Open "Show year-by-year breakdown" to see exactly how the balance builds year by year, or use "Reset" to return to the example values.
Future Value vs. Annualized Return
This calculator reports two different "rate" figures because they answer different questions.
Effective annual rate (EAR): converts your nominal annual rate into the true annual rate implied by the compounding frequency you selected — for example, 6% compounded monthly behaves like roughly 6.17% compounded once a year.
Annualized return (money-weighted): is the internal rate of return (IRR) of every cash flow in and out of the account — your initial deposit, every monthly contribution, and the final balance. Because it weighs the timing of your contributions, it can differ slightly from the EAR, especially when you contribute steadily over a long period.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the interest that has already accumulated. Because each period's interest is added to the balance before the next period's interest is calculated, growth accelerates over time compared to simple interest.
What is the compound interest formula?
The basic formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. When regular contributions are added, the calculation becomes a series (annuity) sum on top of this formula — which is what this calculator simulates month by month.
What is annualized return?
Annualized return expresses the growth of an investment as an equivalent constant yearly rate. This calculator reports it as a money-weighted (internal) rate of return, which accounts for the timing and size of every contribution, not just the starting and ending balance.
How does compounding frequency affect returns?
The more frequently interest compounds (daily vs. monthly vs. annually), the higher the effective annual rate for the same nominal annual rate, because interest starts earning interest sooner. The difference is usually small for typical rates but grows with higher rates and longer time horizons.
Is this calculator financial advice?
No. This tool provides estimates for educational purposes only and does not account for taxes, fees, inflation, or investment risk. Consult a licensed financial advisor before making investment decisions.