Compound Interest Calculator
The engine of all long-term saving: a starting sum plus regular contributions, growing at a nominal rate, compounded daily to yearly. Watch interest overtake contributions on the chart.
Interest on interest — the whole idea in one mechanism
Compounding means each period's interest joins the principal and itself earns interest next period. Early on the effect is unremarkable; later, the interest on interest quietly becomes the largest contributor. Add regular contributions and you have the complete engine of long-term saving.
Future value = P(1 + r)n + C × ((1 + r)n − 1) ÷ r, r = rate ÷ periods per year
Example: $10,000 plus $200 a month at 6%, compounded monthly, for 10 years: you contribute $34,000 in total and finish with $50,969.84 — $16,969.84 of it is interest the money earned by itself. Stretch to 25 years and interest overtakes everything you put in.
Frequency matters less than time
Daily compounding beats yearly, but by a sliver — on the example, less than $100 across a decade. Time and the contribution habit move the answer by tens of thousands. Choose the frequency your account actually uses, then stop optimizing it and go back to the years.
How this is calculated
The rate is a nominal annual rate divided by the compounding frequency; contributions are converted to a per-period amount (monthly contribution × 12 ÷ periods per year) and land at the end of each period — the conventions printed here and used site-wide. The chart compounds year by year on the same basis. The effective yield of this setup is on the APY calculator if you need it for comparison shopping.
Frequently asked questions
What rate should I use for investments?
A planning assumption, not a promise: long-run diversified stock portfolios have returned roughly 7–10% nominal per year across very long periods, with deep drawdowns inside them. Conservative planning often uses 5–7%.
Why do contributions show as 'per period' behind the scenes?
Compounding math needs the contribution in the same rhythm as the compounding. A $200 monthly habit inside quarterly compounding is entered as $600 per quarter — the page handles the conversion so your monthly figure stays natural.
Is this the same as the investment calculator?
The engine is the same; the framing differs. This page is the pure interest mechanism (banks, bonds, savings); the investment calculator speaks portfolio and adds the smooth-return warning in investor language.
What does 'nominal' mean here?
A nominal rate needs its compounding frequency to mean anything: 6% nominal compounded monthly is an effective 6.17%. If your account quotes an APY instead, the savings calculator takes APY directly.
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