Compound Interest Calculator
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See how your money grows when interest earns interest. Enter an initial deposit, monthly contributions, an interest rate and a time period — the calculator instantly shows your future balance, how much came out of your pocket and how much the compounding did for you.
What is compound interest?
Compound interest means earning interest on your interest. Each period, returns are calculated on the entire accumulated balance — your original principal plus every interest payment received so far — rather than on the principal alone. This is what makes long-term investing grow exponentially, and also what makes unpaid credit-card debt spiral.
Savings accounts, bonds, index funds and virtually every long-term investment vehicle compound over time.
The compound interest formula
Without contributions, the formula is A = P × (1 + i)ⁿ, where A is the final amount, P the principal, i the periodic interest rate and n the number of periods.
With a recurring monthly contribution (PMT), the future value of the deposit stream is added: A = P × (1 + i)ⁿ + PMT × [((1 + i)ⁿ − 1) ÷ i]. This calculator applies exactly that formula, converting yearly rates to their monthly equivalent when needed.
Example: $1,000 upfront + $100 per month
Investing $1,000 upfront plus $100 every month at 10% per year for 10 years means depositing $13,000 of your own money. With compounding, the final balance reaches roughly $22,580 — about $9,580 of pure interest, a 74% gain on everything you put in.
That is the snowball effect: interest looks small in the early years, then the curve accelerates. Doubling the time horizon far more than doubles the result.
Simple vs. compound interest
Simple interest is always calculated on the original principal: $1,000 at 10% yearly earns a flat $100 every year. Compound interest reinvests those earnings — year two earns $110, year three $121, and so on.
Over 10 years, $1,000 becomes $2,000 with simple interest but $2,594 with compounding. Over 30 years the gap is dramatic: $4,000 versus $17,449.
Frequently asked questions
Is 1% per month the same as 12% per year?
No. Because of compounding, 1% per month equals 12.68% per year. The calculator converts between periods using the equivalent rate, not a simple multiplication.
Does the calculator account for taxes or inflation?
No — results are gross. Taxes on investment income and inflation both reduce your real return. To approximate real purchasing power, run the simulation with your expected real rate (nominal rate minus inflation).
How often is interest compounded here?
Monthly. Yearly rates are first converted to their monthly equivalent, and contributions are assumed to be made at the end of each month.
Sources
Mathematical simulation before taxes, fees and inflation. Not investment advice.
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Also available in Portuguese: Calculadora de Juros Compostos