Compound Interest Calculator
See how your savings or investment can grow over time.
How compound interest works
Compound interest is interest calculated on both your original principal and the interest already earned, so growth accelerates over time. This calculator applies the compounding frequency you choose to your initial amount, then adds your monthly contributions (assumed at month-end) to project the balance at the end of the term.
Why starting early matters
Because each period's interest is calculated on a growing balance, the same monthly contribution invested for a longer time produces disproportionately more growth. Starting a few years earlier — even with smaller contributions — often outperforms starting later with larger ones.
This tool provides an estimate for planning purposes only. Actual investment returns vary and are never guaranteed.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal, growing by the same amount each period. Compound interest is calculated on the principal plus all interest already earned, so your money grows faster over time - the classic "interest on interest" effect.
What does the compounding frequency (monthly, yearly, etc.) actually change?
The more often interest compounds, the sooner each bit of interest starts earning its own interest. Monthly compounding grows your balance slightly faster than yearly compounding, even at the same stated annual rate.
Does adding regular contributions really make a big difference?
Yes - consistent monthly contributions, even small ones, can outweigh the initial lump sum over a long time horizon because each contribution gets its own compounding period. This is why starting early matters more than starting big.