What does compounding frequency change?

At the same nominal rate, more frequent compounding credits interest sooner, so that interest earns interest for longer. $10,000 at 8% for 10 years becomes $21,589.25 compounded yearly but $22,196.40 compounded monthly — about $607 more. The effect grows with the rate and the time horizon.

When are the contributions applied?

At the end of each compounding period, after that period’s interest is credited (an “ordinary annuity”). Each deposit starts earning interest only from the following period, which is why this tool can show a slightly smaller future value than calculators that assume deposits at the start of each period.

Is the contribution monthly or yearly?

It is per compounding period, matching the frequency you selected: with monthly compounding it is a monthly deposit, with yearly compounding a yearly one. If you switch frequency, re-enter the contribution so it still reflects what you actually plan to save.

Should I enter an APR or an APY?

Enter a nominal annual rate — the tool applies your chosen compounding frequency to it. If your bank advertises an APY, the compounding is already baked into that number, so select yearly compounding and enter the APY to avoid counting it twice.

Can I use partial years?

Yes — years × frequency is rounded to the nearest whole period, so 2.5 years at monthly compounding runs for exactly 30 months. At yearly compounding the same 2.5 rounds to 3 whole years, so pick a finer frequency when fractional years matter.

Does it account for inflation, taxes, or fees?

No — the projection is nominal and pre-tax. Interest and investment gains are usually taxable, and fund fees reduce the effective return. A common approximation is to enter a lower “real” rate (expected return minus expected inflation) to see growth in today’s money.

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Compound Interest Calculator

See how investments grow with compound interest and optional regular contributions.

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Initial amount$Annual return%YearsContribution / period$

Future value

$22,196.4

Total contributed

$10,000

Interest earned

$12,196.4

How it works

This calculator projects how a lump sum — optionally topped up with regular deposits — grows when interest is compounded: each period’s interest is added to the balance and itself earns interest from then on. Use it for savings accounts, certificates of deposit, or long-term investment projections where you assume an average annual return.

Without contributions the future value follows FV = P × (1 + r ⁄ n)^(n × t), where P is the starting amount, r the annual rate as a decimal, n the number of compounding periods per year (12 monthly, 4 quarterly, 1 yearly) and t the time in years. With contributions, the tool simulates the account period by period: the balance first grows by the periodic rate, then the deposit is added — so contributions land at the end of each period and start compounding from the next one.

A fully worked example: $10,000 at 8% for 10 years, compounded monthly. The periodic rate is 0.08 ÷ 12 per month over 120 periods, so FV = 10,000 × (1 + 0.08 ⁄ 12)¹²⁰ = $22,196.40 — $12,196.40 of it interest, meaning the money more than doubles without a single extra deposit. Add a $200 contribution at the end of every month and the balance reaches $58,785.61 on $34,000 contributed in total, so $24,785.61 comes from interest.

Frequency matters, but less than most people expect: the same $10,000 at 8% for 10 years grows to $21,589.25 compounded yearly versus $22,196.40 monthly — a gap of $607.15. Two pitfalls to avoid. First, the contribution is per compounding period, so switching from monthly to yearly compounding silently changes “200” from $200 a month to $200 a year. Second, the rate you enter is a nominal annual rate; if your bank quotes an APY, which already includes compounding, choose yearly and enter the APY directly.

Treat the output as a projection, not a promise: market returns vary year to year, and the result ignores taxes, fund fees, and inflation. For long horizons, re-running the numbers with a lower “real” rate gives a rough inflation-adjusted picture.

Frequently asked questions

What does compounding frequency change?: At the same nominal rate, more frequent compounding credits interest sooner, so that interest earns interest for longer. $10,000 at 8% for 10 years becomes $21,589.25 compounded yearly but $22,196.40 compounded monthly — about $607 more. The effect grows with the rate and the time horizon.
When are the contributions applied?: At the end of each compounding period, after that period’s interest is credited (an “ordinary annuity”). Each deposit starts earning interest only from the following period, which is why this tool can show a slightly smaller future value than calculators that assume deposits at the start of each period.
Is the contribution monthly or yearly?: It is per compounding period, matching the frequency you selected: with monthly compounding it is a monthly deposit, with yearly compounding a yearly one. If you switch frequency, re-enter the contribution so it still reflects what you actually plan to save.
Should I enter an APR or an APY?: Enter a nominal annual rate — the tool applies your chosen compounding frequency to it. If your bank advertises an APY, the compounding is already baked into that number, so select yearly compounding and enter the APY to avoid counting it twice.
Can I use partial years?: Yes — years × frequency is rounded to the nearest whole period, so 2.5 years at monthly compounding runs for exactly 30 months. At yearly compounding the same 2.5 rounds to 3 whole years, so pick a finer frequency when fractional years matter.
Does it account for inflation, taxes, or fees?: No — the projection is nominal and pre-tax. Interest and investment gains are usually taxable, and fund fees reduce the effective return. A common approximation is to enter a lower “real” rate (expected return minus expected inflation) to see growth in today’s money.
Is my data uploaded?: No — everything runs in your browser.

Compound Interest Calculator

How it works

Frequently asked questions

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