Compound Interest Calculator

Estimate the future value of a lump sum compounded yearly, quarterly, monthly, or daily, with optional monthly deposits. Results are estimates, not a return forecast.

Principal Amount ($) *

Annual Interest Rate (%) *

Time Period (Years) *

Monthly Contribution ($)

Compounding Frequency

Smart Tips

• For the lump sum, more frequent compounding (daily vs. monthly vs. annually) results in a higher balance

• Start investing early - time is the most powerful factor in compound growth

• Monthly deposits are an end-of-month annuity. They do not compound on the same dates as a daily or annual lump sum

• The Rule of 72: divide 72 by your interest rate to estimate doubling time

The Formula

A = P(1 + r/n)^(nt)

Deposit FV = PMT × (((1 + i)^m − 1) / i)
i = (1 + r/n)^(n/12) − 1, m = 12 × t

A = Final Amount
Total value after compounding

P = Principal
Initial investment

r = Annual Rate
Interest rate as decimal

n = Compounding Frequency
Times per year

t = Time Period
Years invested

PMT = Monthly deposit
Added at the end of each month

i = Monthly deposit rate
Equivalent monthly rate for the selected frequency

m = Deposit count
Years × 12, including a fraction of a month

Final amount is the lump-sum future value plus the deposit future value. Interest earned is the final amount minus the starting principal minus the raw sum of deposits. Total contributions is that raw sum, not the growth on the deposits. A rate of zero or below is rejected.

Key Insights

Time is Your Friend

The longer you invest, the more compound interest works in your favor, creating exponential growth.

Frequency Matters

For the lump sum, more frequent compounding leads to a higher balance, and the difference shrinks as the frequency rises. Deposits stay monthly.

Regular Contributions

Deposits are added at the end of each month and grow at the monthly rate equivalent to the compounding frequency you select.

Rate Impact

Even small differences in interest rates compound dramatically over long periods, making rate selection crucial.

Frequently Asked Questions

Compound interest is interest calculated on the initial principal and accumulated interest from previous periods. It's "interest on interest" that grows your money exponentially over time.

Simple interest is calculated only on the principal amount, while compound interest includes interest on previously earned interest, leading to much faster growth over time.

Key factors are principal amount, interest rate, compounding frequency (daily, monthly, annually), and time period. Higher rates and more frequent compounding accelerate growth.

For the lump sum, more frequent compounding produces a higher balance, and the difference shrinks as the frequency rises. Monthly deposits do not switch to that frequency. They stay end-of-month and use the equivalent monthly rate.

Deposits are optional and always monthly, even if the lump sum compounds daily or annually. Each deposit is added at the end of the month. The number of deposits is years times 12, so 0.5 years is 6 deposits and 0.1 years is 1.2 deposits. Those deposits grow at the monthly rate i = (1 + r/n)^(n/12) − 1, which is the monthly equivalent of the effective annual rate for the frequency you select. The last deposit does not earn interest. Total contributions is the sum of the deposits only.

The lump sum uses A = P(1 + r/n)^(nt). Monthly deposits use the ordinary-annuity formula in the formula section, with a monthly rate taken from the effective annual rate of the selected frequency. No market data or outside rate feed is used. The result is an estimate. Source: SEC Investor.gov compound interest glossary: https://www.investor.gov/introduction-investing/investing-basics/glossary/compound-interest.

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Final Amount

Enter values to calculate

Interest Earned

Total Contributions

Note:Compound interest calculations show how investments grow over time. Actual returns may vary based on market conditions. Always consult with financial advisors.