Compound Interest Calculator
Project how a lump sum — plus an optional recurring monthly contribution — grows over time at a chosen compounding frequency, with a year-by-year growth table and a side-by-side comparison against simple interest.
Compound Interest Calculator
Project how a lump sum — plus an optional recurring monthly contribution — grows over time at a chosen compounding frequency, with a year-by-year growth table and a side-by-side comparison against simple interest.
| Year | Invested | Interest | Balance |
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How Compound Interest Calculator Works
Compound interest is interest calculated on both the original principal and the interest already earned, which is why it grows faster than simple interest over time:
- A — the final (maturity) amount
- P — the principal (initial investment)
- r — the annual interest rate (as a decimal)
- n — the number of times interest compounds per year (1 = yearly, 12 = monthly, etc.)
- t — the number of years
If you add a recurring monthly contribution, the calculator layers a standard future-value-of-annuity calculation on top of the lump-sum formula above, modeling something close to a monthly SIP (systematic investment plan).
Worked Example
Principal: $10,000 · Rate: 8% annual · Time: 5 years · Compounding: Monthly
A = 10000 × (1 + 0.08/12)12×5 ≈ $14,898
That's about $4,898 in interest earned — noticeably more than the $4,000 you'd earn from simple interest on the same principal, rate and time, because each month's interest itself starts earning interest.
Frequently Asked Questions
Does the compound interest calculator support monthly contributions?
Yes. Add a monthly contribution to model a recurring investment (SIP-style) alongside your lump sum, and compare the result against simple interest.
What compounding frequency should I choose?
Use whatever frequency your bank or investment product actually compounds at — this is usually stated in the product's terms. Monthly compounding yields slightly more than yearly, for the same stated annual rate.
How much more does compound interest earn compared to simple interest?
The gap grows with both the interest rate and the time period — over short periods or low rates the difference is small, but over years or decades compounding can meaningfully outpace simple interest, which the calculator shows directly with a side-by-side comparison.
What does the year-by-year growth table show?
Click "View year-by-year growth" to see, for each year, how much you've invested in total, how much interest has accumulated, and your running balance — useful for visualizing how growth accelerates over time.