Compound Interest Calculator

Discover the power of compound growth. Calculate how your investments can multiply over time with regular contributions.

Investment Parameters

Projected Results

Enter your investment details

Click "Calculate Growth" to see your financial projection

Understanding Compound Interest

What is Compound Interest?

Compound interest is the addition of interest to the principal sum of a loan or deposit, where the interest that has been added also earns interest. This differs from simple interest, where interest is calculated only on the principal amount.

The Power of Compounding

Compound growth is often called the "eighth wonder of the world" because it has the potential to generate exponential growth over time. The longer your money compounds, the more dramatic the results become due to the exponential nature of growth.

Key Benefits of This Tool

  • Visualize Financial Growth - See how small, regular contributions can grow into substantial amounts
  • Compare Contribution Frequencies - Understand how contributing monthly vs annually affects your growth
  • Plan Long-Term Investments - Project your portfolio value for retirement or other financial goals
  • Understand Interest Impact - See how different interest rates dramatically affect outcomes

Frequently Asked Questions

How often should I contribute to maximize compounding?

The more frequently you contribute, the more compounding can work in your favor. Monthly contributions typically yield better results than annual ones.

What's a realistic interest rate to expect?

Historical stock market returns average 7-10% annually. Conservative investments might yield 3-5%, while higher-risk investments may yield more.

How does this calculator account for taxes?

This calculator shows pre-tax growth. Actual results may vary based on your tax situation and account type (taxable vs tax-advantaged).

Is compound interest only for investments?

No, compound interest applies to savings accounts, loans, credit cards, and any financial instrument where interest is applied periodically.