Compound Interest Calculator
Visualize long-term investment growth.
What is compound interest and how does it work?
Compound interest is the interest you earn on your initial investment plus all the interest accumulated over time. By reinvesting earnings, your money grows exponentially. The more frequently interest compounds — monthly, quarterly, or annually — the faster your balance increases. This calculator uses the formula A = P(1 + r/n)^(nt) where P is the starting principal, r the annual rate, n the compounding periods per year, and t the number of years.
How to use the Compound Interest Calculator
Enter your initial investment, the annual interest rate (as a percentage), how many years you plan to save, and how often interest compounds. Click "Calculate" to see your estimated future value — including total contributions and total interest earned over the entire period.
Example calculation
Suppose you start with $10,000, earn 7% annually, and leave it for 20 years with monthly compounding. Your future value would be approximately $40,000 — four times the original amount, even with no additional contributions. The longer the time frame and the higher the rate, the greater the compounding effect.
Frequently Asked Questions
Which compounding frequency gives the highest return?
More frequent compounding yields a higher balance. Monthly compounding gives slightly more than quarterly, and quarterly more than annually, assuming the same annual rate and time period.
Can I calculate regular contributions with this tool?
This version calculates the growth of a single initial lump sum. For periodic contributions (e.g. monthly deposits), look for a dedicated SIP or recurring investment calculator, which extends the compound formula to handle regular payments.