Compound Interest Calculator
See how your money grows with compound interest
Amount you're starting with
Amount added each month (optional)
Expected annual return
How long your money will grow
Investment Growth
Total Contributions
$0
Interest Earned
$0
Future Value
$0
Projected Value in 0 years: $0
How to Use This Calculator
This calculator demonstrates the power of compound interest - how your money grows exponentially over time as you earn interest on both your principal and accumulated interest.
Step-by-Step Guide:
- Enter Initial Investment - The amount you're starting with
- Add Monthly Contributions - Regular investments (set to $0 for one-time investment)
- Input Interest Rate - Expected annual return (historical average: 7% for stocks)
- Set Investment Period - Number of years your money will grow
- Choose Compound Frequency - How often interest is calculated (monthly is typical)
- Click Calculate - See your investment growth projection
Tip: The more frequently interest compounds, the faster your money grows. Monthly compounding yields better returns than annual compounding.
Compound Interest FAQs
What exactly is compound interest?
Compound interest means earning interest on both your original investment and the accumulated interest from previous periods. This creates exponential growth over time.
How does compounding frequency affect growth?
More frequent compounding (daily vs. annually) yields higher returns because interest is calculated on a growing balance more often. Monthly compounding is typical for most investments.
What's a realistic interest rate to expect?
For long-term investments: Stocks average 7-10%, bonds 3-5%, savings accounts 1-5%. Adjust for inflation by subtracting 2-3% from these figures.
How important are regular contributions?
Extremely important! Regular contributions significantly boost your final balance due to dollar-cost averaging and more compounding periods.
Does this account for taxes or fees?
No. For accurate projections, reduce your expected return by your tax rate and any investment fees. A 7% return might be 5% after taxes and fees.
Why is starting early so important?
Compound interest works best with time. Starting 10 years earlier can often double your final balance due to exponential growth.
