Compound Interest
Project investment growth with regular contributions
Final balance
Total contributed
Interest earned
| Year | Contributed | Interest | Balance |
|---|---|---|---|
About Compound Interest
Compound interest is interest that's calculated on both the original principal and the accumulated interest from previous periods. The more frequently interest compounds, the faster the balance grows. Adding regular contributions on top further accelerates growth — known informally as "the magic of compounding".
This calculator applies a contribution at the end of each compounding period, recomputes the balance with the period's interest, and reports a year-by-year breakdown of contributions, interest, and ending balance.
Frequently asked questions
How does compounding frequency affect growth?
More frequent compounding produces slightly higher returns over the same period. The difference between monthly and daily compounding is small in practice, but compounding at all (vs. simple interest) makes a large difference over decades.
Does this account for inflation?
No — figures are nominal. To see results in today's dollars, subtract an estimated inflation rate from the nominal interest rate to get a real rate, then re-run the calculation.