See how money grows over time when interest earns its own interest. Enter a starting amount, an interest rate and a number of years — and any regular monthly deposit — and this calculator shows the future value, how much you put in, and how much is interest. It runs in your browser.
About this compound interest calculator
Compound interest is interest that earns interest: each period, the interest you have already earned is added to your balance, so the next period's interest is calculated on a larger amount. Over years, that snowball effect makes a big difference. This calculator lets you enter a starting amount, a yearly interest rate, how long you save for, and an optional regular monthly deposit, then choose how often interest is added (yearly, quarterly, monthly or daily). It shows three numbers: the future value of your savings, the total you put in, and the interest earned on top. The figures are estimates that ignore tax and fees, and everything is calculated in your browser.
Frequently asked questions
- What is compound interest?
- It is interest calculated on your original money plus the interest already added, so your balance grows faster over time than with simple interest.
- Does "interest added" change the result?
- Yes, a little. Adding interest more often — daily rather than yearly — produces slightly more growth for the same rate.
- Are tax and fees included?
- No. The result is a clean estimate before any tax, charges or inflation, which vary by person and place.
How interest earns interest
Compound interest functions through a mathematical process where your principal balance is multiplied by the interest rate at set intervals. Once that interest is calculated, it is added to the principal to create a new, larger base for the next calculation cycle. This creates a feedback loop where the interest generated in one period contributes to the interest generated in the following period. Over extended time horizons, this compounding effect causes your total balance to grow at an accelerating rate rather than a linear one.
The standard formula for calculating this growth is expressed as the principal amount multiplied by the sum of one and the annual interest rate divided by the compounding frequency, all raised to the power of the product of the compounding frequency and the number of years. When monthly contributions are added to the mix, the formula becomes more complex because each individual deposit compounds for a different length of time. This requires calculating the future value of the initial lump sum separately from the future value of the ongoing annuity stream. The final result is the sum of these two distinct parts.
The most common mistake users make is failing to account for the impact of inflation on the purchasing power of their future balance. While the calculator shows the nominal dollar amount, the actual value of those dollars will likely decrease due to rising costs over time. Another frequent error is assuming that interest rates remain static throughout the entire duration of the investment. Market volatility and changing central bank policies mean that your actual annual percentage yield will fluctuate, which can significantly alter your terminal balance compared to the fixed-rate projection provided here.