Methodology
The calculator applies periodic compounding to your principal and recurring contributions. Growth is modeled from your expected annual return and selected compounding frequency.
Compound Interest Calculator
Watch your money grow with compound interest over time
Enter Details
Results
Interest Earned
$6,470.09
Final Amount
$16,470.09
Compound Tips
More frequent compounding (daily vs annually) accelerates growth over time
Quick Facts
Rule of 72: Divide 72 by interest rate to estimate years to double your money
Note
Inflation can reduce the real purchasing power of returns over long periods
Formula
A = P(1 + r/n)^(nt)
Where: P = Principal, r = Annual rate, n = Compounding frequency, t = Time in years
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Assumptions
- Return rate is constant over the full time horizon.
- Contributions happen on schedule without interruption.
- No taxes, fees, or account minimum constraints are deducted unless manually adjusted in assumptions.
Worked example
Example: $10,000 initial amount, $300 monthly contribution, 7% annual return, monthly compounding, 20 years. The ending balance reflects compounded growth from both principal and contributions.
Edge cases and limitations
- Short horizons can be dominated by contribution amount rather than compounding effect.
- High assumed returns can overstate outcomes if market volatility is ignored.
- Taxes and fund fees can materially reduce real-world ending value.
When this calculator is not appropriate
This is not a replacement for investment advice or retirement planning software that models variable returns, sequence risk, taxes, and withdrawal strategies.