Compound Interest Calculator
See the power of compounding and how your savings can grow
📈 What is compound interest
Compound interest means earning interest on the principal and on interest already earned. Each new period applies the rate to a larger balance, so growth accelerates over time.
With simple interest, earnings apply only to the original amount. With compound interest, they apply to the full accumulated balance, including prior interest.
The calculator uses initial capital, monthly contributions, and an annual rate with monthly compounding — similar to many bank deposits and investment accounts.
📐 Formula
The final amount has two parts:
- Growth of initial capital: S = P × (1 + r)n
- Growth of monthly contributions: S = A × ((1 + r)n − 1) / r
where:
- P — initial capital
- A — monthly contribution
- r — monthly rate (annual ÷ 12 ÷ 100)
- n — number of months (years × 12)
Net interest = final amount − (initial capital + all contributions).
💡 Example
Initial capital 100,000, monthly contribution 5,000, 15% per year, 5 years:
- Invested: 100,000 + 5,000 × 60 = 400,000
- Final amount: ≈ 653,591
- Net interest: ≈ 253,591
Without contributions, the same 100,000 at 15% for 5 years would grow to ≈ 210,718. Regular deposits nearly tripled the outcome.
✅ Tips
- The earlier you start, the stronger compounding works — time often matters more than the first deposit size.
- Regular contributions raise the result a lot, even when each amount is small.
- The rate is annual; internally it is converted to a monthly rate for monthly compounding.
- Taxes, fees, and inflation are not included — factor them in separately for precise planning.