Grow a starting balance plus recurring deposits: future value, total interest earned, and growth multiple with monthly, quarterly, or annual compounding — formula shown.
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FORMULA USEDCompound Interest Calculator
What compounding does
Compound interest is interest that earns interest: each credit joins the principal, so the next credit is computed on a larger base. Over decades that feedback loop does most of the work — the gap between simple and compound interest on the same dollars is the entire case for starting early.
The formulas
Lump sum: A = P(1 + r/n)^(nt), where r is the nominal annual rate, n the compounding periods per year, and t the years. Deposits: recurring contributions form an ordinary annuity, FV = PMT × ((1 + r/n)^(nt) − 1) ÷ (r/n), stacked on top of the lump sum.
Does compounding frequency matter?
Yes, but less than marketing suggests. $1,000 at 5% for 10 years ends at $1,628.89 compounded annually, $1,647.01 monthly, $1,648.66 daily. Rate and time dominate; frequency is a rounding error by comparison.
What the projection ignores
The rate is held constant for the whole horizon, which no real investment does. Taxes, fees, and inflation are not modeled: a 7% nominal return with 2.5% inflation is about 4.4% real. Use the output to compare scenarios, not to promise yourself an outcome.
Worked example
Start with $1,000 at 5% compounded monthly, depositing $100 each month for 10 years.
Future value ≈ $17,175 — $13,000 put in plus about $4,175 of interest.
How to use it
Enter the starting principal, annual rate, and number of years.
Pick the compounding frequency your account actually uses.
Add a recurring deposit and its cadence, or leave the deposit at $0.
Read the future value, interest earned, and growth multiple.
Frequently asked questions
What is the difference between compound and simple interest?
Simple interest pays only on the original principal; compound interest pays on the principal plus every dollar of interest already credited. At 5% for 10 years, $1,000 earns $500 simple but $647.01 compounded monthly.
How does compounding frequency affect growth?
More frequent compounding credits interest sooner, so it starts earning its own interest sooner. On $1,000 at 5% for 10 years: annually $1,628.89, monthly $1,647.01, daily $1,648.66 — real, but small next to the effect of rate and time.
How do regular contributions accelerate compound growth?
Deposits add both principal and future compounding. In the default scenario, $12,000 of monthly deposits earns another $3,528 of interest, and money you put in — principal plus deposits — accounts for about 76% of the final balance.
What is the formula with periodic deposits?
A = P(1 + r/n)^(nt) for the lump sum, plus PMT × ((1 + r/n)^(nt) − 1) ÷ (r/n) for deposits at the end of each compounding period, with r the nominal annual rate, n periods per year, and t years.
What is the Rule of 72?
A mental-math shortcut: divide 72 by the annual rate to approximate doubling time. At 6% money doubles in about 12 years, at 9% in about 8. It approximates the exact solution ln(2) ÷ ln(1+r).
Does this account for inflation?
No — the projection is nominal. To think in today’s buying power, divide out inflation or subtract it from the rate: 7% returns with 2.5% inflation is roughly 4.4% real growth.