Compound Interest Calculator
See how your savings and investments grow over time with compound interest and regular contributions. Everything runs in your browser.
Growth Over Time
Year-by-Year Breakdown
| Year | Contributions | Interest | Balance |
|---|
Understanding Compound Interest
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It's the reason investments grow exponentially rather than linearly over time — often called the "eighth wonder of the world."
How It Works
If you invest $10,000 at 7% annual interest compounded monthly, after one year you'll have about $10,723 — not just $10,700. The extra $23 comes from earning interest on the interest that accumulated during the year. Over 20 or 30 years, this effect becomes dramatic.
The Power of Regular Contributions
Adding even a small monthly contribution significantly accelerates growth. $500/month at 7% for 20 years turns into over $260,000 in contributions but over $400,000 in total value — the difference is compound interest working on every contribution you make.
Compound Frequency
- Daily — Savings accounts, some bonds
- Monthly — Most common for investment accounts
- Quarterly — Some bonds and CDs
- Annually — Simple comparison baseline
More frequent compounding produces slightly higher returns, but the difference between monthly and daily is typically small. The real growth driver is time and consistent contributions.