Compound Interest Calculator
See how your money grows when interest earns interest — add monthly contributions, choose your compounding frequency, and watch the future value, total invested and interest earned update live with a year-by-year growth chart.
Invested vs interest
Balance growth by year
Year-by-year breakdown
How compound interest works
Compound interest is interest earned on your principal and on the interest already added — so your balance grows exponentially rather than in a straight line. For a lump sum, the future value is:
A = P (1 + r/n)nt
where A is the future value, P the principal, r the annual rate as a decimal, n the compounding periods per year, and t the years. Once you add regular monthly contributions, a single formula gets unwieldy, so this tool iterates period by period — adding each deposit and compounding the balance — which is both accurate and easy to follow.
Why contributions supercharge growth
The real magic appears when you keep adding money. Every monthly contribution raises the balance that earns interest, and each deposit then compounds for the rest of the term. Over long periods, steady contributions frequently add more to the final total than your starting principal — the growth chart above makes this visible as the gold "interest" band widens year after year.
Compounding frequency
Compounding daily reinvests interest sooner than compounding annually, so it earns slightly more. The effect is real but usually modest at ordinary rates — switch the frequency to see exactly how much it changes your result. What matters far more over decades is the rate, the time invested, and how consistently you contribute.
Compound vs simple interest
The counterpart to this tool is simple interest, which pays only on the original principal and grows linearly. Comparing the two over the same period shows the exponential advantage of compounding — the single most important idea in long-term saving and investing. Because everything here runs in your browser, you can model scenarios freely and privately.
Frequently asked questions
What is the compound interest formula?
For a lump sum, A = P(1 + r/n)^(nt). With regular monthly contributions, the future value is best found by iterating period by period — which is what this calculator does.
How does compounding frequency affect returns?
More frequent compounding reinvests interest sooner, earning a little extra. The effect is real but usually modest at typical rates. Switch daily/monthly/quarterly/annual above to compare.
Why do monthly contributions matter so much?
Each deposit raises the balance that earns interest and then compounds for the rest of the term, so contributions dramatically accelerate growth — often adding more than the starting principal.
What's the difference between compound and simple interest?
Simple interest is earned only on the principal (linear growth); compound interest is earned on principal plus accumulated interest (exponential growth). Over long periods the gap is large.
Is this the same as a SIP?
The maths of regular contributions compounding over time is the same idea behind a SIP. Real returns vary year to year, so treat this as an illustration of steady compounding.