Compound Interest Calculator
Calculate compound interest with optional monthly contributions. See your final balance, total interest earned, and a detailed year-by-year growth breakdown.
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Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which only applies to the principal), compound interest causes your balance to grow exponentially over time. The more frequently interest compounds, the faster your money grows.
How does compounding frequency affect growth?
The more often interest compounds, the more you earn. For example, $10,000 at 7% interest compounded annually for 10 years gives ~$19,672, while monthly compounding gives ~$20,097. The difference grows larger with higher rates and longer time periods. Daily compounding yields slightly more than monthly.
How do monthly contributions help?
Regular monthly contributions dramatically accelerate wealth building. Adding even $100/month to a $10,000 investment at 7% over 20 years turns ~$38,697 (no contributions) into ~$90,000. This is because each contribution immediately starts earning compound interest. Starting early and contributing consistently is the most powerful wealth-building strategy.