Compound Interest Calculator
See how investments grow with compounding. Enter principal, regular contributions, interest rate, and compounding frequency to get a year-by-year growth chart and inflation-adjusted real value.
Compound interest means earning interest on interest: each period's interest is added to principal, and the next period's interest is calculated on the new (higher) total. The formula for a lump sum with no contributions is: FV = P × (1 + r/n)^(n×t), where P is principal, r is annual rate, n is compounding periods per year (like 365 in a daily compound interest calculator), and t is years. With regular contributions (PMT per period), add the annuity: FV += PMT × [(1 + r/n)^(n×t) − 1] / (r/n).
The difference between monthly and annual compounding is small at short horizons but material over decades: $10,000 at 7% annually for 30 years = $76,123; monthly compounding = $81,745 — a 7.4% difference. The inflation-adjusted real value uses BLS CPI-U historical rates for perspective (series CUUR0000SA0).
Worked example: $10,000 principal, $200/month contributions, 7% annual rate, monthly compounding, 20 years. Lump-sum FV = $10,000 × (1.005833)^240 = $40,839. Contribution FV = $200 × [(1.005833)^240 − 1] / 0.005833 = $104,528. Total FV ≈ $145,367.
How it's calculated
How to use this calculator
- Enter your initial principal (starting balance).
- Enter your annual interest rate and compounding frequency.
- Set the number of years and optional regular contributions.
- Enable the inflation adjustment to see real (purchasing-power-adjusted) value.
Formula and assumptions
FV = P * (1 + r/n)^(n*t) + PMT * [(1 + r/n)^(n*t) - 1] / (r/n) where: P = principal r = annual rate (decimal) n = compounding periods per year t = years PMT = periodic contribution Real value = FV / (1 + inflationRate)^years
- Contributions
- Distributed across compound periods within each year; timing (beginning/end of period) applied each compound period
- Rate
- Nominal annual rate — not inflation-adjusted
- Taxes
- Not modeled — apply post-tax rate if desired
- Year-by-year
- Period-by-period inner loop for accuracy; matches Investor.gov behavior
Worked example
$10,000 principal, 7% annual rate, monthly compounding, 10 years, no contributions
Limitations
- Assumes constant rate — actual investment returns fluctuate.
- Taxes on interest/gains are not included — use your after-tax expected return.
- Contribution amounts are assumed constant — no escalation modeled.
- Educational estimate only — not investment advice.
Frequently asked questions
Compound interest grows your money exponentially. $10,000 at 7% monthly compounding over 10 years becomes $20,097. Adding regular contributions multiplies growth further. The inflation-adjusted real value shows true purchasing-power gains.
Recent updates
- May 2026Contribution math upgraded to true period-by-period compounding (matches Investor.gov); outputs rounded to cents; schema hardened against non-finite inputs.
- Jan 2026Added inflation-adjusted real value column using BLS CPI-U 2025 annual average (315.6).
- Nov 2024Added regular-contribution annuity formula alongside lump-sum mode.
- Aug 2024Initial launch with basic compound interest (lump sum, multiple compounding frequencies).