Compound Interest Calculator

The power of compound interest

Enter your initial principal, expected annual return, time horizon and monthly contribution. The calculator shows your future value, total contributions, interest earned and a stacked growth chart so you can see how earnings overtake contributions over time.

Formula

Future value = P × (1 + i)ⁿ + PMT × [(1 + i)ⁿ − 1] ÷ i, where P is the principal, PMT is the contribution per period, i is the periodic rate and n is the number of periods.

This is a projection based on a constant return rate. Real investment returns fluctuate and are not guaranteed.

Frequently Asked Questions

What is compound interest?

Compound interest is interest earned on both your original principal and on previously earned interest. Over long periods this "interest on interest" effect drives most of your growth.

How is compound interest calculated?

Lump-sum future value = principal × (1 + i)ⁿ, where i is the periodic rate and n is the number of periods. Recurring contributions add an annuity term: contribution × [(1 + i)ⁿ − 1] ÷ i.

Does compounding frequency matter?

Yes. More frequent compounding (monthly vs. annually) produces a slightly higher ending balance for the same nominal rate, because interest is reinvested sooner.

What return rate should I use?

Use a realistic expected return for your investments. Historically, a diversified US stock index has averaged roughly 7% after inflation, but returns vary year to year and are never guaranteed.