Formulas: Future Value of Principal: A_p = P × (1 + r/n)^(n×t). Future Value of Contributions: A_c = PMT × [((1 + r/n)^(n×t) - 1) / (r/n)]. Total Future Value = A_p + A_c.
Compound interest is one of the most powerful concepts in finance, describing the process where the interest you earn on an investment earns interest itself over time.
Unlike simple interest, which is calculated only on the initial principal, compound interest accelerates growth because the principal base grows continuously.
This calculator allows you to input your initial principal, monthly contribution, interest rate, and time horizon. It outputs the total value, total principal, and total interest earned.
Understanding how compounding frequency (e.g. monthly vs. annually) affects your final balance helps you optimize savings and investments.
Example inputs and outputs using the calculator logic.
Quick links to similar calculators.
Answers to help you use the calculator correctly.
Compound interest is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.
The more frequently interest is compounded (e.g. daily vs. annually), the faster your investment grows because interest is added to your principal sooner and starts earning interest itself.
Yes, though this calculator assumes end-of-period contributions for standard conservative estimates.
No, this calculator computes nominal returns. To get real returns, you would need to adjust the interest rate for estimated inflation and taxes.