Compound Interest Calculator
Simulate the snowball effect of compound interest with monthly contributions.
The snowball effect of compound interest
Compound interest is interest that earns interest. Each year, the returns you generated in previous years also start producing returns. Early on, growth looks linear — most of your balance is money you deposited. But as years pass, the interest layer swells, and eventually it dwarfs the contributions themselves. Time is the single most powerful lever: doubling the duration often more than doubles the final balance. Start early, stay consistent, and let the math do the heavy lifting.
The formula
FV = P(1+r)ⁿ + PMT × (((1+r)ⁿ − 1) / r), where P is the initial capital, PMT the periodic contribution, r the periodic rate, and n the number of periods.
Frequently asked questions
How does this compound interest calculator work?
It projects the growth of your capital by applying your chosen annual return at the selected compounding frequency (monthly, quarterly, semi-annual or annual), adding your monthly contributions to the principal at each period.
What's the difference between the initial capital and monthly contributions?
The initial capital is the lump sum invested up front, while monthly contributions are regular additions that accelerate your savings' growth through the compounding effect.
What does the compounding frequency actually change?
The more often interest compounds, the sooner interest already earned starts generating interest of its own, which slightly improves the final result at an identical rate.
Is the return rate I enter guaranteed?
No, it's an assumed average annual return that you choose yourself. Real financial markets fluctuate from year to year, and no stock or fund investment guarantees a constant return.
Does this result account for inflation and taxes?
No, the figure shown is a nominal gross amount. It does not deduct capital gains tax or account for inflation eroding purchasing power; for a real-terms estimate, subtract expected inflation from your return rate.
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