Compound Interest Calculator
See how your money grows over time with compound interest and regular contributions.
Final balance
$37,405.09
Total contributed
$22,000.00
Interest earned
$15,405.09
| Year | Balance | Contributed | Interest |
|---|---|---|---|
| 1 | $11,962.16 | $11,200.00 | $762.16 |
| 2 | $14,066.16 | $12,400.00 | $1,666.16 |
| 3 | $16,322.27 | $13,600.00 | $2,722.27 |
| 4 | $18,741.46 | $14,800.00 | $3,941.46 |
| 5 | $21,335.54 | $16,000.00 | $5,335.54 |
| 6 | $24,117.15 | $17,200.00 | $6,917.15 |
| 7 | $27,099.84 | $18,400.00 | $8,699.84 |
| 8 | $30,298.15 | $19,600.00 | $10,698.15 |
| 9 | $33,727.66 | $20,800.00 | $12,927.66 |
| 10 | $37,405.09 | $22,000.00 | $15,405.09 |
About This Tool
Compound interest accrues on principal plus accumulated interest. The future value formula is FV = P(1 + r/n)^(nt), where P is principal, r the annual rate, n the compounding frequency, and t years. Continuous compounding takes n to infinity, giving FV = P·e^(rt).
The calculator handles arbitrary compounding frequencies (daily, monthly, quarterly, annually, continuous), recurring contributions, and inflation adjustment.
Compound interest is what Albert Einstein supposedly called "the eighth wonder of the world" — a quote with no verified attribution but accurate sentiment. The math: interest earned in period n becomes principal in period n+1, so growth is exponential rather than linear. Simple interest (no compounding) on $10,000 at 7% for 30 years pays out $21,000 in interest plus the $10,000 principal = $31,000 total. Compound annually at the same rate: $10,000 × (1.07)^30 = $76,123. Compound monthly: $81,627. Compound continuously: $81,627 — the limit is closely approached well before continuous, because once you're compounding daily the effective annual rate is already very near the continuous limit. Annual percentage yield (APY) captures this: APY = (1 + APR/n)^n − 1. A 7% APR compounded monthly has an APY of 7.23%; compounded daily it's 7.25%.
A worked example: $5,000 initial, $500 monthly contribution, 8% annual return, 30 years. Without contributions: $5,000 × (1.0067)^360 ≈ $54,907. With $500 monthly contributions, the future value of the contribution stream is the annuity formula: $500 × ((1.0067)^360 − 1) / 0.0067 ≈ $745,180. Total ≈ $800,087. Inflation-adjusting at 3% gives a real value of approximately $329,000 in present-day purchasing power — still substantial, but less than the nominal number suggests. The calculator splits these out: principal contributions ($185,000), interest earned ($615,087), and inflation-adjusted real value.
Limitations: the formula assumes a fixed rate, which doesn't match real-world investments. Stock returns are highly variable year to year; sequence-of-returns risk means the same average return produces different ending values depending on when the bad years happen. The calculator gives a smoothed estimate, not a guarantee. Taxes, fees, and withdrawals shift the actual outcome significantly. For long-term planning, use the calculator for orientation but expect the actual outcome to vary by ±30% from the central estimate. For mortgage and savings products with fixed contractual rates, the formula is exact.
The about text and FAQ on this page were drafted with AI assistance and reviewed by a member of the Coherence Daddy team before publishing. See our Content Policy for editorial standards.