Compound Interest Calculator
Compound interest is often called the eighth wonder of the world. Use this professional-grade tool to project how your initial investment and monthly contributions will grow over time through the power of compounding.
Growth Parameters
Ready for Simulation
Configure your portfolio parameters and click Project Growth to see the power of compounding in action.
What is Compound Interest?
Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. Accelerating your wealth building often depends not just on how much you save, but on when you start and how frequently the interest compounds.
The Compounding Formula
The standard formula for compound interest with regular contributions is:
- A: The future value of the investment
- P: The initial principal investment
- r: The annual interest rate (decimal)
- n: The number of times interest compounds per year
- t: The number of years the money is invested
- PMT: The monthly contribution amount
Why Frequency Matters
The more frequently interest is compounded, the higher your final balance will be. For example, interest that compounds daily will result in a slightly higher return than interest that compounds annually, even if the interest rate is the same. Our calculator allows you to simulation various frequencies—from daily to annually—to see the impact on your bottom line.