Compound Interest Calculator

See how your money grows over time with compound interest. Visualize the power of compounding with monthly contributions.

Compound interest is often summarized as 'interest on interest': each period's earnings get added to the balance and then themselves start earning a return, so growth accelerates rather than staying flat the way simple interest would. This calculator runs that compounding explicitly, period by period, for however many times per year you select — daily, monthly, quarterly, or annually — adding your monthly contribution (pro-rated to match the compounding frequency) at each step. Compounding frequency changes two things here, not one. First, for a given nominal annual rate, compounding more often produces a higher Effective Annual Rate, because interest starts earning its own interest sooner. Second -- and usually the larger effect -- your contributions are pro-rated to the compounding period, so choosing Annually deposits a full year's worth of contributions in one lump at year end rather than spreading it across twelve monthly deposits, and that money loses a year of growth each cycle. At the default settings, switching from Annually to Monthly raises Future Value by about $22,600, of which only about $2,700 comes from the higher effective rate; the rest is purely contribution timing. If you contribute monthly in real life, leave the frequency on Monthly. Time Period also tends to matter more than frequency at typical rates, because the compounding effect itself grows with the number of periods, not just their spacing — a 30-year horizon at a modest rate typically outgrows a 10-year horizon at a considerably higher one — at the default contribution, 30 years at 5% beats 10 years at 20%, though a truly extreme rate can still close the gap. The Effective Annual Rate output translates your nominal rate and chosen compounding frequency into the single annualized rate that would produce the same growth if compounded just once a year, letting you compare across different compounding schedules on equal footing. What this calculator does not model: variable or negative-return years (a constant rate is assumed throughout), taxes on investment gains, or account fees that would erode the stated return.