What is compound interest?
Compound interest is interest calculated on the original principal and interest previously added to the balance. This can accelerate growth over longer periods.
Finance calculator
Compound Interest Calculator
Estimate how money may grow when interest is added to the balance and future interest is earned on both the original principal and previously earned interest. Include optional recurring contributions to estimate the future balance, total contributions, and interest earned.
Growth assumptions
Estimate compound growth
This projection assumes a consistent nominal annual rate and regular contributions. It does not model taxes, fees, inflation, market losses, or changing rates.
Estimated result
Future balance
$47,526.55
Starting principal
$10,000.00
Recurring contributions
$24,000.00
Total contributions
$34,000.00
Interest earned
$13,526.55
Estimated interest represents 28.46% of the projected future balance.
Growth schedule
Contributions and compound interest
| Year | Contributions | Interest | Ending balance |
|---|---|---|---|
| 1 | $2,400.00 | $567.39 | $12,967.39 |
| 2 | $2,400.00 | $719.21 | $16,086.60 |
| 3 | $2,400.00 | $878.79 | $19,365.39 |
| 4 | $2,400.00 | $1,046.54 | $22,811.93 |
| 5 | $2,400.00 | $1,222.87 | $26,434.80 |
| 6 | $2,400.00 | $1,408.23 | $30,243.03 |
| 7 | $2,400.00 | $1,603.06 | $34,246.09 |
| 8 | $2,400.00 | $1,807.87 | $38,453.96 |
| 9 | $2,400.00 | $2,023.15 | $42,877.11 |
| 10 | $2,400.00 | $2,249.45 | $47,526.55 |
What is compound interest?
Compound interest means earning interest on both the original deposit and interest already added to the balance. As the balance grows, each future interest calculation may use a larger amount. Time, rate, compounding frequency, and contributions all affect the projection.
What is this calculator for?
Use it to explore hypothetical savings, certificates of deposit, retirement contributions, education savings, emergency funds, and long-term investment scenarios. It compares the amount supplied through deposits with the amount generated by estimated interest.
Compound interest formula
For principal without additional deposits, the formula is A = P(1 + r/n)ⁿᵗ, where A is future value, P is principal, r is the nominal annual rate, n is compounding periods per year, and t is time in years. This tool uses a period-by-period schedule so recurring contributions and their timing can also be included.
Compounding frequency and APY
Compounding frequency describes how often interest is added. A nominal rate compounded more frequently can produce a higher effective annual yield. This calculator treats the entered rate as a nominal annual rate, not an APY.
Contributions and long-term growth
Regular deposits may have a substantial effect on the ending balance. Increasing contributions annually can model a saver who raises deposits over time, but the calculation remains a hypothetical constant-rate projection.
Compound interest FAQs
What is the difference between simple and compound interest?
Simple interest is calculated only on principal. Compound interest can earn interest on both principal and previously earned interest.
Does monthly compounding earn more than annual compounding?
At the same nominal annual rate, more frequent compounding generally produces a slightly higher effective return because interest is added sooner.
How do recurring contributions affect compound growth?
Recurring contributions increase the balance available to earn future interest. Earlier contributions generally have more time to compound.
What does contribution timing change?
A beginning-of-period contribution is deposited before that period's growth, while an end-of-period contribution is deposited afterward.
Does this calculator predict investment returns?
No. It illustrates a constant-rate scenario. Actual rates and investment returns can change, and investments may lose value.
Methodology and disclaimer
Numeravo converts the entered nominal rate and compounding frequency into an equivalent monthly growth rate, then processes contributions and interest chronologically. Results are educational estimates, not guaranteed returns or financial, investment, tax, or legal advice. Taxes, fees, inflation, volatility, and losses are excluded.
Created and maintained by Numeravo Technologies LLC.