Compound Interest Calculator
Find out how much your money can grow with the power of compound interest. Enter the initial capital, monthly contribution, interest rate and term — we'll calculate future value, total invested and accumulated interest over time.
What is compound interest
Compound interest is interest on interest: each period, returns are calculated on the updated balance (principal + prior interest). It's the engine behind every long-term investment — the more time, the bigger the exponential effect.
Compound interest formula with deposits
Given an initial deposit PV, monthly contribution PMT, monthly rate i and n months, future value is FV = PV·(1+i)^n + PMT·[((1+i)^n − 1)/i]. The first term is initial-capital growth; the second is the sum of all compounded contributions.
Using it for retirement planning
Pick a target retirement amount and use the calculator to back out the monthly contribution needed at a realistic rate. Small contributions started early beat large contributions started late — that's compounding.
FAQ
Which interest rate should I use?
Use a conservative estimate. For broad equity index funds, historical averages of ~7%/year (real) or ~10%/year (nominal) are common references. For bonds, use current yields.
Simple vs compound interest?
Simple interest accrues only on the original principal; compound interest accrues on principal plus prior interest. Over long horizons the gap is huge.
Does this account for taxes?
No, the values are pre-tax. Subtract your applicable capital gains or income tax to estimate the net result.