About this compound interest calculator
The compound interest calculator shows how money grows when interest is earned on both principal and prior interest. It is the core math behind savings accounts, index funds, and long-term retirement investing.
How to use
- Enter starting principal, annual rate, and time horizon.
- Choose compounding frequency.
- Optionally add a monthly contribution.
- See future value, contributions, and interest earned.
Formula
A = P (1 + r/n)nt
Monthly deposits are added using a standard ordinary annuity approximation at a monthly rate.
Worked examples
Example: $10,000 at 7% for 10 years, compounded monthly, plus $200/month → future value grows well beyond contributions alone thanks to compounding.
Tips
- Time in the market usually beats trying to time the market.
- Higher compounding frequency slightly increases returns for the same nominal rate.
- Results are illustrative and ignore taxes and fees.
Frequently asked questions
What is compound interest?
Compound interest means you earn interest on your original money and on interest already added, accelerating growth over time.
Is this the same as APR?
Nominal annual rate and compounding frequency together determine effective yield. APR/APY disclosures can differ by product — check your provider.