Compound Interest Calculator
See how a starting balance grows with compound interest plus optional monthly contributions, adjusting the compounding frequency and currency. It separates how much you contributed from how much the compounding added.
Compound Interest Calculator
Project how savings grow with compounding and recurring contributions. Useful for retirement, emergency funds, or any long-term goal.
Assumes constant rate and regular contributions. Adjust compounding frequency to model different account types.
Educational estimate only; real returns vary with market performance and fees.
Compounding frequency, in plain terms
Compound interest means you earn interest on your interest, not just on the original sum. The more often interest is added (compounded), the faster it grows, because each new interest payment starts earning immediately. Daily compounding beats monthly, which beats annual - though at normal rates the difference between them is smaller than people expect.
The dramatic growth in a compounding chart comes from time, not frequency. Doubling the years usually does far more than changing how often interest is applied.
Reading the result honestly
Look at two numbers: total contributions and total interest.
- In short horizons, your contributions dominate; in long ones, interest takes over - that crossover is the whole point of starting early.
- Regular monthly contributions often matter more than a larger one-time deposit.
- Use a realistic rate; small rate changes compound into large differences over decades.
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FAQs
What is the difference between simple and compound interest?▼
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus all previously earned interest, so it accelerates over time. This tool models compound interest.
Does compounding frequency really change much?▼
At typical savings rates, moving from annual to daily compounding adds a modest amount. The big driver of growth is the interest rate and the number of years, not the frequency.
Are taxes and inflation included?▼
No. The figure is a gross, nominal projection. Real returns are reduced by taxes on interest and by inflation eroding purchasing power, so treat the number as an upper bound.
Can I model regular deposits, not just a lump sum?▼
Yes. Add a monthly contribution and the tool compounds each deposit for its remaining time, which is how recurring savings and retirement accounts actually build up.
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