Compound Interest Calculator
Calculate how an investment grows over time with compound interest and monthly contributions, with a year-by-year growth chart.
- Final balance
- $17,175.24
- Total contributed
- $13,000.00
- Interest earned
- $4,175.24
Growth over time
Final balance at year 10: $17,175.24
How it works
This follows the same approach as the U.S. SEC's investor.gov compound interest calculator: rather than a single lump-sum formula, growth is simulated month by month so a fixed monthly contribution can be added at the end of each month and keep earning interest for the rest of the term (the standard 'future value of an ordinary annuity' convention).
Your chosen compounding frequency (annual, quarterly, monthly, or daily) is first converted into an equivalent effective monthly rate — effectiveMonthlyRate = (1 + r/n)ⁿ⁄¹². Compounding that rate twelve times a year reproduces the plain compound interest formula A = P(1 + r/n)ⁿᵗ exactly when there's no monthly contribution, so choosing a monthly contribution of $0 gives the same answer as a standard compound interest calculator.
The chart below breaks the balance for each year into what you put in (initial deposit plus contributions to date) versus what interest has added — the same two-part breakdown investor.gov's calculator uses, since that split is usually more informative than the total alone.
FAQ
What's the difference between compound and simple interest?
Simple interest is calculated only on the original principal for the whole term. Compound interest is recalculated each period on the growing balance (principal plus previously earned interest), so it grows faster over time. See the Simple Interest Calculator for a direct comparison.
When exactly is the monthly contribution added?
At the end of each month, after that month's interest has already been applied to the prior balance. This is a standard, conservative assumption (an 'ordinary annuity') — a contribution added at the start of the month instead would end up slightly higher, since it would earn interest for one extra month.
Does compounding frequency matter much?
Yes, though the effect shrinks as frequency increases. Going from annual to monthly compounding makes a noticeable difference; going from monthly to daily makes a much smaller one, since the formula approaches continuous compounding as n grows.