Compound Interest Calculator
Calculate compound interest, investment growth, and future value with regular contributions
Enter your initial principal amount - this is the starting amount you're investing or depositing. For example, if you're starting with $10,000 in savings, enter 10000.
Input the annual interest rate as a percentage. For example, if your savings account offers 4.5% APY, enter 4.5. This rate will be used to calculate how much interest you earn each compounding period.
Specify the time period in years. This represents how long you plan to let your money grow. For retirement planning 20-40 years ahead, or short-term goals like 5-10 years for a house down payment.
Select your compound frequency. This determines how often the interest is calculated and added to your principal. Monthly compounding (most common for savings accounts) means interest is calculated 12 times per year. Daily compounding yields slightly higher returns than monthly, while yearly compounding is common for bonds.
Choose whether you'll make additional contributions. Select 'None' for one-time investments, 'Monthly' for regular savings deposits, or 'Yearly' for annual contributions like IRA deposits.
If adding regular contributions, enter the amount you'll contribute each period. For example, if you plan to save $500 every month, enter 500 when 'Monthly' is selected.
Click 'Calculate' to see comprehensive results including your final amount, total interest earned, total contributions made, and a detailed year-by-year breakdown showing how your investment grows over time.
Pro Tips
- Higher compound frequency means more growth - daily compounding earns more than monthly, which earns more than yearly compounding, though the difference may be small
- Even small regular contributions make a huge difference over long time periods thanks to compound interest - $100/month for 30 years at 7% grows to over $120,000
- Use the yearly breakdown table to see exactly when your investment reaches key milestones and plan accordingly
- Compare different scenarios by adjusting the interest rate to see how higher-return investments affect your final amount
- The power of compound interest increases dramatically with time - starting early is more important than starting with a large amount
- For retirement planning, account for inflation by subtracting 2-3% from your expected return rate to see real purchasing power
Why Use This Tool?
The Compound Interest Calculator is an essential tool for anyone serious about building wealth and achieving financial goals. It transforms abstract financial concepts into concrete numbers, showing exactly how much your money will grow over time. Instead of wondering whether you're saving enough for retirement, you get definitive answers showing that $500/month at 7% becomes $600,000 in 30 years. The yearly breakdown table provides motivation by displaying milestone years when you'll reach specific amounts, helping you stay committed during the long journey to financial independence. For young people, it dramatically illustrates the value of starting early - seeing that investing at 25 versus 35 means hundreds of thousands more in retirement is often the push needed to start immediately. The calculator helps you make better financial decisions by comparing scenarios: should you pay off your mortgage or invest the extra money? Input both scenarios and see which yields better results. It's invaluable for setting realistic expectations - understanding that $200/month won't make you a millionaire in 10 years, but will grow to $600,000 in 40 years, helps you commit to long-term thinking rather than get-rich-quick schemes. Parents use it to plan college savings, showing that starting with $3,000 at birth and adding $200/month can fully fund a college education 18 years later. Financial advisors use it to show clients the real cost of early withdrawals - pulling $10,000 from retirement at age 35 doesn't just cost $10,000, it costs the $75,000 that money would have grown to by age 65. The visual breakdown of principal versus interest is eye-opening, demonstrating that with enough time, interest earnings dwarf your contributions - a retirement account might have $400,000 of contributions but $1,000,000 of interest earnings. This calculator makes the invisible force of compound interest visible, concrete, and actionable. Whether you're planning retirement, saving for a house, building an emergency fund, or teaching children about money, it provides the clarity and motivation needed to make smart financial decisions and stick with them for years. It's not just a calculator - it's a window into your financial future, and often the catalyst that transforms vague money worries into concrete, achievable action plans.