Compound Interest Calculator
Calculate how your investment grows with compound interest over time.
$
%
yr
$
%
Final Balance
—
After inflation: —
Total Contributions
—
Principal + deposits
Interest Earned
—
— of final balance
Growth Over Time
Year-by-Year Breakdown
| Year | Balance | Contributions | Interest Earned | Return |
|---|
Advertisement · 336×280
What is Compound Interest?
Compound interest is the process of earning interest on both your initial principal and the accumulated interest from previous periods. Often called the "eighth wonder of the world," it's the most powerful concept in personal finance.
A = P × (1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]
Where A is the final amount, P is principal, r is annual rate, n is compounds per year, t is time in years, and PMT is your regular contribution.
How to Use This Calculator
Enter your initial investment, set your expected annual return (the S&P 500 has historically averaged ~7% adjusted for inflation), choose how often interest compounds, add any monthly contributions, and hit Calculate to see your projected growth.
What is the difference between simple and compound interest?
Simple interest only calculates interest on the principal. Compound interest calculates interest on the principal plus all previously earned interest — meaning your gains accelerate over time.
How often should interest compound for maximum growth?
More frequent compounding means slightly higher returns. Daily compounding yields marginally more than monthly, which yields more than annual. In practice, the difference between daily and monthly is small for most investors.
What return rate should I use?
For long-term stock market investments, 7% (inflation-adjusted) is a common conservative estimate based on historical S&P 500 performance. For savings accounts or CDs, use your actual quoted rate, which is typically 1–5%.