How this compound interest calculator works
This calculator simulates your balance month by month. Each month it applies the periodic interest implied by your chosen compounding frequency, then adds your monthly contribution. That makes the result accurate for any mix of an initial lump sum and ongoing deposits.
The formula
For a single lump sum, compound interest follows:
where A is the final amount, P the principal, r the annual rate (as a decimal), n the number of compounding periods per year, and t the number of years. When you add a recurring monthly contribution, each deposit compounds for the remaining time — which is what the year-by-year table above reflects.
Why compounding frequency matters
The more often interest is compounded, the sooner it starts earning interest of its own. For the same nominal rate, daily compounding yields a little more than annual compounding. Try switching the Compounding frequency dropdown to see the difference.
Frequently asked questions
- What is compound interest?
- Interest earned on both your original principal and on the interest already added to it. This "interest on interest" is what makes long-term saving and investing grow faster over time.
- How is compound interest with monthly contributions calculated?
- The balance is grown by the periodic rate each month and your contribution is added. This tool runs that simulation for every month over your chosen time horizon.
- Does compounding frequency matter?
- Yes — more frequent compounding produces a slightly higher final balance for the same nominal rate.
- Is this calculator free?
- Yes, free, no sign-up, and it runs entirely in your browser — your numbers never leave your device.
Related calculators
To figure out how much to save each month to hit a specific target, use the savings goal calculator. If you want to see investment returns and compare against market benchmarks, try the investment return calculator. For debt, see the loan payoff calculator or credit card payoff calculator.