Compound Interest Calculator
Watch your money grow with compound interest, monthly contributions, and any compounding frequency.
Growth Summary
Year-by-Year Breakdown
| Year | Start Balance | Contributions | Interest | End Balance |
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What is a Compound Interest Calculator?
A compound interest calculator shows how an initial sum of money grows over time when the interest earned is reinvested. Unlike simple interest, compound interest accelerates growth because you earn interest on both the principal and accumulated interest.
This tool is invaluable for retirement planning, savings goals, and investment projections. By adding regular monthly contributions, you can see the powerful effect of consistent investing combined with compounding returns.
How to Use
- Enter your starting principal amount.
- Input the expected annual rate of return and investment duration in years.
- Select how often interest is compounded and add any monthly contributions.
- Click Calculate to see your final balance and year-by-year growth.
Frequently Asked Questions
What is compounding frequency?
Compounding frequency is how often interest is calculated and added to your balance. More frequent compounding (daily vs. annually) yields slightly higher returns.
How much difference does monthly contribution make?
Monthly contributions dramatically accelerate growth due to dollar-cost averaging and compounding. Even small monthly additions can double or triple your final balance over decades.
What does continuous compounding mean?
Continuous compounding is the theoretical limit where interest is compounded infinitely often. It produces the maximum possible growth for a given rate and is calculated using the mathematical constant e.
Is this calculator accurate for stocks?
The calculator assumes a fixed annual return. Real stock returns vary year to year, so treat the results as a long-term projection rather than a guarantee.