What is a compound interest calculator?

A compound interest calculator is a tool that estimates how your savings or investments can grow over time when interest is added to both your original balance and any previously earned interest. It lets you input your starting amount, interest rate, time period and, if you wish, regular deposits or withdrawals to see how your balance might change in the future.

How is compound interest calculated?

Compound interest is usually calculated with the formula A = P(1 + r/n)^(nt), where A is the future value, P is the initial amount, r is the annual interest rate (in decimal form), n is the number of compounding periods per year and t is the number of years. The calculator uses this formula for you so you can focus on adjusting the inputs and reviewing the results.

When is my interest compounded?

Interest can be compounded at the beginning or at the end of each compounding period, depending on the product or scenario. In the calculator, you can choose how often interest is compounded, such as yearly, quarterly or monthly, and whether deposits or withdrawals are applied at the start or end of each period.

Can I include regular deposits or withdrawals in the calculator?

Yes. The compound interest calculator allows you to include regular deposits and withdrawals as part of your calculation. You can choose the contribution amount, how often payments are made and whether they occur at the start or end of the period. This helps you model real-life saving, investing or retirement withdrawal scenarios.

What is the effective annual interest rate?

The effective annual interest rate, sometimes called the annual percentage yield (APY), is the actual rate you earn in a year after compounding is taken into account. When interest is compounded more than once a year, the effective annual rate will be higher than the nominal rate. The calculator can show this so you can compare different compounding options.

What is the difference between Rate of Return (RoR) and Time-Weighted Return (TWR)?

Rate of Return (RoR) shows the percentage gain or loss on your original investment over the entire period, assuming you do not add or withdraw money. Time-Weighted Return (TWR) is used when there are deposits or withdrawals and shows how the investment itself has performed by removing the impact of cash flows. The calculator can show RoR for simple scenarios and TWR for calculations that include regular contributions or withdrawals.

Is this compound interest calculator giving financial advice?

No. The compound interest calculator is provided for educational and illustrative purposes only. It is designed to help you understand how compound interest works and how different inputs affect potential growth. It does not take your personal circumstances into account and should not be treated as financial advice. You should speak to a qualified financial adviser before making investment or savings decisions.

Compound Interest Calculator

Watch your money grow with compound interest

Understand the power of compounding in your finances. Enter your amounts and let the calculator show how your balance builds over time.

AI Investment Insight

Your AI explanation will appear here.

Scenarios

Graph Section

The chart visualizes your projected account balance, broken out by total contributions and interest growth for each period. Switch between line and bar views to compare trends over time.

Results Overview

Final Value	-
After Inflation	-
Total Invested	-
Total Contributions	-
Total Interest	-

Yearly Breakdown

Year	End Balance	Total Contributions	Total Interest
Run a calculation to see yearly details.

Free Compound Interest Calculator

Use our free compound interest calculator to estimate how your savings or investments could grow over time. See projections with or without regular contributions, compare monthly vs. yearly compounding, and understand how interest can accelerate your long-term financial goals.

Disclaimer: This calculator is for educational purposes only and does not provide financial advice.

What is compound interest?

Compound interest lets your savings grow on both your original deposit and the interest that’s already been earned creating a snowball effect over time. Simple interest only grows on the starting amount; compounding grows on everything that’s accumulated.

How to maximize compounding

Start early: time is the biggest multiplier small amounts grow a lot over decades.
Contribute regularly: every deposit begins compounding right away.
Higher frequency: monthly compounding can beat yearly at the same rate.

How compound interest is calculated

The core formula is A = P(1 + r/n)^nt, where P is your initial deposit, r is the annual rate, n is compounding periods per year, and t is years. The calculator handles deposits, withdrawals, custom frequencies, and start/end-of-period options automatically.

Example: $10,000 over 20 years

At 5% annually, compounded yearly for 20 years:

Ending balance: $26,532.98
Total interest earned: $16,532.98

Actual results vary with rates, inflation, and market conditions.

Compounding with monthly deposits

Adding $100 per month to the scenario above (5% for 20 years) yields:

Balance: ~$67,121
Interest earned: ~$33,121
Total deposits: $34,000

You can model weekly, bi-weekly, monthly, quarterly, or yearly deposits.

Effective annual interest rate (APY)

APY is the true annual return after compounding. More compounding periods generally raise the effective annual rate versus the nominal rate.

Deposits, withdrawals, and scenarios

Model fixed deposits, recurring withdrawals, percentage based withdrawals, and whether cash flows land at the beginning or end of each period useful for retirement, saving, or tax planning.

Understanding RoR vs. TWR

Rate of Return (RoR): shown when there are no deposits or withdrawals; measures total growth start to finish.
Time Weighted Return (TWR): shown when cash flows are present; strips out deposit/withdrawal timing to isolate performance.

Frequently asked questions

When is interest compounded? You can choose beginning or end of each period.
Can I add regular deposits or withdrawals? Yes fixed or percentage, with your preferred frequency.
What is the effective annual rate? It’s the real annual rate after compounding is applied, often above the nominal rate.

Final thoughts

Compound interest is one of the strongest levers for long-term wealth. Start early, contribute consistently, and pick products with favorable compounding terms to make time work in your favor. Use the calculator above to explore scenarios and plan with confidence.

Disclaimer: This calculator is for educational purposes only and does not provide financial advice.