Free Compound Interest Calculator

Project the growth of your savings with recurring deposits and compound interest. See how your money can grow over time with this powerful financial tool.

Investment Details

Enter your investment information to calculate future growth

The starting amount of your investment
Amount added to investment each month
The expected annual return on your investment
Total duration of your investment
Monthly
Quarterly
Semi-Annual
Annual

Your Investment Summary

Final Balance
$ 61,200
Total Contributions
$ 29,000
Total Interest
$ 32,200
Growth Rate
110.9%

Value Composition

Balance Projection

Yearly Growth Projection

Year Start Balance Contributions Interest End Balance Growth
1 $ 5,000.00 $ 2,400.00 $ 358.50 $ 7,758.50 55.2%
2 $ 7,758.50 $ 2,400.00 $ 643.35 $ 10,801.85 39.2%
3 $ 10,801.85 $ 2,400.00 $ 937.56 $ 14,139.41 30.9%
4 $ 14,139.41 $ 2,400.00 $ 1,242.22 $ 17,781.63 25.8%
5 $ 17,781.63 $ 2,400.00 $ 1,558.44 $ 21,740.07 22.3%

Understanding Compound Interest

How Compound Interest Works

Compound interest is the addition of interest to the principal sum of a loan or deposit. It's essentially interest on interest, which causes your wealth to grow exponentially over time.

Compound Interest Formula:
A = P × (1 + r/n)^(n×t)

Where:
A = Future value of investment
P = Principal investment amount
r = Annual interest rate (decimal)
n = Number of times interest is compounded per year
t = Number of years
                    

For recurring contributions, the formula becomes more complex as each contribution compounds for a different period. This is why using a compound interest calculator is essential for accurate projections.

Maximizing Your Compound Growth

  • Start early: The earlier you begin investing, the more time compound interest has to work in your favor.
  • Consistent contributions: Regular deposits significantly boost your investment growth over time.
  • Higher compounding frequency: The more frequently interest is compounded, the greater your returns.
  • Reinvest dividends: Automatically reinvesting dividends accelerates compound growth.
  • Minimize fees: High fees can significantly erode your compound growth over long periods.

Frequently Asked Questions

What's the difference between simple and compound interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus accumulated interest, leading to exponential growth.
How often should interest compound?
The more frequent the compounding, the greater your returns. Monthly compounding will yield more than annual compounding at the same interest rate.
How does time affect compound interest?
Time is the most powerful factor in compound growth. The longer your investment horizon, the more dramatic the compounding effect becomes.
Can compound interest work against me?
Yes, when you borrow money, compound interest can work against you, causing debt to grow rapidly if not managed properly.
What's the Rule of 72?
The Rule of 72 estimates how long it takes for an investment to double: Divide 72 by the annual interest rate. For example, at 6% interest, your money doubles in about 12 years.