Compound interest calculator

This compound interest calculator lets you project how your money can grow over time by combining an initial balance, recurring contributions, different annual rates, monthly/annual/daily compounding, inflation, and fees. Use it for quick checks or advanced simulations with index funds or the S&P 500.

What is compound interest?

Compound interest is calculated on the initial balance plus any interest already earned. In other words, today’s interest generates tomorrow’s interest. This “snowball effect” drives long-term growth in savings and investing.

Unlike simple interest, which is always calculated on the original principal, compound interest increases the base every compounding period, accelerating growth as time passes.

How to use the compound interest calculator

Follow these steps to get a complete simulation:

1. Enter the initial capital you start with.
2. Select the annual rate you expect (for example 3%, 5%, 8%).
3. Set the number of years you plan to stay invested.
4. Choose a compounding frequency: yearly, semiannual, quarterly, monthly, weekly, or daily.
5. Optional: add a recurring contribution (monthly or yearly) to simulate ongoing savings.
6. Optional: add an annual inflation figure to estimate purchasing power at the end.
7. Optional: include annual fees (fund or broker costs).
8. Optional: pick an investment preset (S&P 500, index funds, fixed income, crypto) to load default interest and fee values, then tweak them.
9. Click “Calculate” to get final balance, interest earned, a compound interest table, and the growth curve.

Compound interest formula

The general formula without recurring contributions is:

Final balance = Initial balance × (1 + r / n)n × t

• Initial balance: starting money.
• r: nominal annual rate (decimal, e.g., 0.05 for 5%).
• n: compounding periods per year (1 yearly, 12 monthly, 365 daily…).
• t: time in years.

When you add recurring contributions the math gets complex, so a compound interest simulator like this one adds each contribution at the right time and recalculates the balance every period.

Compound interest examples

Example 1: compound interest without contributions

Imagine investing 1,000 in your currency at 5% annual interest for 10 years, compounded yearly with no extra deposits.

The calculator will show:

• The final balance after 10 years.
• The interest earned versus the starting amount.
• A year-by-year compound interest table with the starting and ending balance for each year.

Example 2: compound interest with monthly contributions

Now start with 1,000, add 100 per month, invest at 6% annually for 20 years, and choose monthly compounding.

In this case, the calculator:

• Adds monthly contributions over time.
• Applies monthly compound interest to the accumulated balance.
• Displays the final balance, total contributed, and interest earned.
• Provides a growth chart to visualize compound interest plus contributions.

Monthly, yearly, or daily compounding

You can compare yearly, monthly, weekly, or daily compounding by changing the frequency. Even with the same annual rate, results vary depending on how many times per year interest is applied:

• Yearly compounding: interest is applied once per year, the simplest model.
• Monthly compounding: interest is split into 12 periods, usually yielding a higher final balance than yearly compounding.
• Daily compounding: interest is applied 365 times a year. The difference versus monthly is modest but noticeable over very long periods.

Adjust these options to see how compounding frequency influences the final return in real time.

Compound interest table and growth chart

Beyond the numeric result, the calculator builds a compound interest table showing each year’s:

• Starting balance.
• Contributions made.
• Interest earned in that period.
• Ending balance at year close.

The table helps you spot when the compound effect really accelerates and how recurring contributions boost growth. From this data you can also plot a capital growth chart to visualize the typical exponential curve of long-term investing.

Simulator for index funds and the S&P 500

Use the advanced presets to treat it as a compound interest simulator for index funds or the S&P 500.

For example, you can:

• Select an S&P 500 preset with an approximate historical average return.
• Choose an equity index fund preset with typical returns and fees.
• Manually adjust the annual rate and fees to reflect your own scenario.

This calculator is not investment advice; it helps you understand how compound interest, recurring contributions, and fees shape long-term capital.

Real final balance adjusted for inflation

Another key feature is the inflation-adjusted final balance, which discounts annual inflation. You get both nominal value and estimated purchasing power at the end:

• Enter an inflation assumption (e.g., 2% or 3% per year).
• The calculator applies it across all simulation years.
• You’ll see a real final balance to compare with the nominal figure.

This is especially useful for long-term goals (retirement, children’s education, buying a home) where inflation erodes purchasing power.

FAQ about the compound interest calculator