Compound Interest Calculator
Estimate how an initial investment and end-of-month contributions may grow at a fixed nominal annual rate. Review the balance, invested amount, interest earned, and a year-by-year breakdown.
Calculator
Results
Illustrative estimate
A fixed rate is assumed. Actual investments can fluctuate, and this estimate excludes taxes, fees, inflation, and withdrawals. It is not financial advice.
Yearly growth
A yearly breakdown appears after a successful calculation.
How it works
What compound interest means
Compound interest is growth calculated on the current balance, including interest already credited. This interest-on-interest effect can become more noticeable over longer periods, but the estimate is not a promise of future returns.
How the calculation works
The annual percentage is treated as a fixed nominal rate. The selected compounding frequency is converted to an equivalent monthly rate. Each month, that rate is applied to the previous balance and then one contribution is added, producing exactly 12 end-of-month deposits per year.
Initial investment versus monthly contributions
The initial investment begins earning from the start of the simulation. A monthly contribution joins the balance only after that month's interest is calculated, so the first contribution does not earn interest during month one.
Compounding frequency and the monthly rate
Daily, monthly, quarterly, semiannual, and annual options describe how often the nominal rate compounds. The calculator uses the equivalent monthly rate (1 + annual rate ÷ frequency)frequency ÷ 12 − 1. This keeps monthly deposits consistent without pretending to simulate calendar dates or individual crediting events.
Total invested versus interest earned
Total invested is the initial amount plus every monthly contribution. Interest earned is the final value minus total invested, making it easier to distinguish deposits from estimated growth.
Reading the yearly growth table
Each row begins with the prior year's ending balance and includes 12 contributions. It then shows interest for that year, cumulative contributions and interest, and the balance after the final monthly deposit.
Assumptions and limitations
The rate and monthly deposit are assumed to remain constant. Actual financial products may credit interest or process deposits differently, and real investments can fluctuate. Taxes, fees, inflation, withdrawals, and changing returns are excluded.
Example calculation
Illustrative compound interest example, separate from your calculation:
- Initial investment
- $10,000.00
- Monthly contribution
- $200.00
- Annual interest rate
- 6%
- Duration
- 10 years
- Compounding
- Monthly
- Final balance
- $50,969.84
- Total contributions
- $24,000.00
- Total invested
- $34,000.00
- Total interest earned
- $16,969.84
This example assumes a fixed 6% nominal annual rate compounded monthly and $200 deposits at the end of every month. It excludes taxes, fees, and inflation.
Frequently asked questions
How does compound interest work?
Interest is added to the balance, and later interest is calculated on both the original money and earlier interest. Regular contributions can then participate in that growth after they are deposited.
What is the difference between principal and contributions?
Principal is the amount present before the first month begins. Contributions are the equal deposits added at the end of each month during the selected duration.
Does compounding frequency change the result?
Yes. With the same nominal annual rate, a different compounding frequency produces a different effective monthly rate and can change the final balance.
Are monthly contributions added before or after interest?
After. Each month, growth is applied to the existing balance first and the monthly contribution is deposited at the end of the month.
Can I start with a zero initial investment?
Yes. Enter zero for the initial investment and a positive monthly contribution to estimate growth funded entirely by recurring deposits. Both amounts may also be zero.
What happens when the annual interest rate is zero?
The balance grows only through the initial investment and monthly contributions. All interest columns remain zero.
Does the calculator include taxes, fees, or inflation?
No. It shows nominal growth before taxes, fees, inflation, withdrawals, and other product-specific adjustments.
Are the results guaranteed?
No. The result is an illustration based on a constant rate and equal deposits, not a prediction or guarantee of investment performance and not financial advice.