Compound Interest Calculator
Calculate compound interest growth with principal, rate, compounding frequency, and time. See year-by-year balance breakdown and total interest earned.
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy
Compound Interest Calculator Formula
FV = P(1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) - 1] / (r/n)
Where FV = Future Value, P = Principal (initial investment), r = Annual interest rate (decimal), n = Compounding frequency per year, t = Time in years, PMT = Regular periodic contribution. The first term calculates growth of the initial lump sum, and the second term (future value of an annuity) calculates growth from regular contributions.
Compound Interest Calculator — Worked Examples
Example 1: Retirement Savings Growth
Problem:You invest $10,000 today and add $500/month at 7% annual return for 30 years. How much will you have?
Solution:FV of initial $10,000 = $10,000 × (1 + 0.07/12)^(12×30) = $10,000 × 8.116 = $81,165\nFV of $500/month = $500 × ((1.005833)^360 - 1) / 0.005833 = $500 × 1,219.97 = $609,985\nTotal = $81,165 + $609,985 = $691,150\nTotal contributed = $10,000 + $500 × 360 = $190,000\nInterest earned = $691,150 - $190,000 = $501,150
Result:Future Value: $691,150 | Contributed: $190,000 | Interest: $501,150 (264%)
Example 2: Early vs Late Start Comparison
Problem:Person A starts at 25, invests $300/month for 40 years. Person B starts at 35, invests $300/month for 30 years. Both earn 7%.
Solution:Person A (40 years): FV = $300 × ((1.005833)^480 - 1) / 0.005833 = $791,957\nTotal contributed: $300 × 480 = $144,000\nInterest: $647,957\n\nPerson B (30 years): FV = $300 × ((1.005833)^360 - 1) / 0.005833 = $365,991\nTotal contributed: $300 × 360 = $108,000\nInterest: $257,991
Result:10 years earlier = $425,966 MORE (2.16x) with only $36,000 extra invested
Compound Interest Calculator — Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal (SI = P × r × t). Compound interest applies to the growing balance — each period's earned interest is added to principal before the next calculation (A = P(1 + r/n)^nt). On $10,000 at 8% over 20 years, simple interest yields $26,000 while annual compounding yields $46,610 — a 79% difference. High-yield accounts advertise APY to reflect compounding rather than the lower nominal rate.