Compound Interest Calculator
Investment Settings
Results Summary
| Ending Balance | — |
|---|---|
| Total Principal (Invested) | — |
| Total Interest Earned | — |
| Total Interest (in %) | — |
How to Use This Compound Interest Calculator
"Interest on interest" sounds abstract until you watch a small balance outrun what simple math would predict. I use this when someone wants a clean compound-only model—no simple-interest toggle—just principal, rate, compounding cadence, and optional recurring deposits.
- Enter initial investment and annual rate. Use the stated nominal % per year from your savings product or investment assumption.
- Set years and/or months. Both fields stack into one total duration.
- Pick compounding frequency. Choose monthly, daily, continuous, or another schedule to match your account terms.
- Add optional contributions. Enter deposit amount, contribution frequency, and beginning vs end timing.
- Press Calculate. Review ending balance, total principal, interest earned, and the yearly compounding schedule.
Compare against simple interest with the Simple Interest Calculator, or toggle both methods on the Interest Calculator.
Compound Interest Formulas and Practical Applications
Compound interest is what makes a high-yield savings account or long-term index fund feel like it picks up speed in later years—the balance is larger, so each period's interest dollar amount grows even at a flat rate.
Discrete compounding
A = P(1 + r/n)nt
P = $5,000, r = 5%, n = 12, t = 10 years → about $8,235 without extra deposits. Switch to annual compounding and the same inputs land near $8,144—roughly $91 less because interest waits longer to stack.
Continuous compounding
A = Pert
Continuous mode is the theoretical ceiling at a given nominal rate—useful in academic finance and for benchmarking how close daily compounding gets to the limit.
Frequently Asked Questions
How does compounding frequency change my ending balance?
More frequent compounding applies interest to prior interest sooner. At the same nominal annual rate, daily compounding yields more than monthly, which yields more than annual.
What is continuous compounding?
Continuous compounding assumes interest accrues every instant. It uses e raised to the rate-times-time power and produces the theoretical maximum growth at a given nominal rate.
How do additional contributions work?
Enter an optional periodic deposit with its own frequency and timing. Each contribution compounds along with your initial investment for the remaining term.
Can I enter years and months together?
Yes. Both fields combine into one total time span before compounding is applied.
What does the compounding schedule show?
The schedule lists yearly deposits, interest earned, cumulative interest, and ending balance so you can see acceleration over time.