This compound interest calculator estimates how an initial investment and recurring contributions may grow over time. It is useful for comparing savings plans, long-term investment scenarios, and the effect of different compounding schedules.
How to use this calculator
Enter the starting amount, the annual nominal rate, and the amount you expect to add regularly. Select both contribution and compounding frequencies, because they are separate assumptions. The projection assumes contributions are added at the end of each contribution period.
Formula & calculation method
A = P(1 + r/n)^(nt), plus the future value of each contributionThe principal compounds at the nominal annual rate divided by the number of compounding periods. Each contribution is projected separately until the end of the term, using the equivalent rate per contribution period. This approach accommodates contribution and compounding frequencies that differ.
Worked example
For example, a starting balance of 10,000 with monthly additions of 100 and a 6% nominal annual rate compounded monthly produces a ten-year projection. The result separates the final balance, total amount paid in, and estimated growth so you can see what compounding added.
Why this is useful
The calculator makes scenario comparison quick: change the term, contribution, rate, or frequency and recalculate without rebuilding a spreadsheet. Showing contributions and interest separately helps distinguish money you deposited from estimated investment growth.
Limitations to keep in mind
Returns are hypothetical and constant in this model. Actual investments may have variable returns, fees, taxes, inflation, and contribution timing differences. The result is not a guaranteed outcome or personalized financial advice.
Frequently asked questions
Does compounding daily always make a large difference?
Not usually. At the same nominal rate, more frequent compounding increases the effective return, but the difference between monthly and daily compounding is often modest compared with the rate, time, and contributions.
When are contributions assumed to be made?
The model adds each contribution at the end of its contribution period. Adding money at the beginning would produce a slightly higher projected balance.
Can I use a negative interest rate?
The calculator accepts negative rates for scenario analysis, but the final balance and period rate must remain mathematically valid. A negative rate represents a decline rather than growth.