Compound Interest Calculator
See how your money grows over time.
Final balance
$126,126.13
- Total invested
- $70,000.00
- Interest earned
- $56,126.13
- Effective monthly rate
- 0.8%
- Period
- 120 months
How it works
Compound interest is interest calculated on the initial principal plus all accumulated interest from previous periods — "interest on interest". It is the main driver of long-term investment growth.
Formula:
FV = P × (1 + i)ⁿ + PMT × [((1 + i)ⁿ − 1) / i]
FV = future value, P = principal, i = rate per period, n = number of periods, PMT = periodic deposit.
Practical examples
$10,000 at 1% per month for 5 years
With no deposits, the future value is ~$18,167. In 10 years it reaches ~$32,900.
$1,000 + $500/mo at 0.8%/mo for 10 years
Total deposited: $61,000. Final balance ~$101,500. $40,500 came from interest alone.
Power of time
Starting at 25 with $300/mo beats starting at 40 with $700/mo over the same end age.
Frequently asked questions
Simple vs compound interest — what's the difference?
Simple interest only accrues on the initial principal. Compound interest adds previous interest to the base, so the balance grows exponentially.
How do I convert a yearly rate to monthly?
i_monthly = (1 + i_yearly)^(1/12) − 1. Example: 12%/yr equals 0.9489%/mo, not 1%/mo.
Are deposits at the beginning or end of the period?
This calculator assumes end-of-period deposits (ordinary annuity).