Compound interest calculator
Simulate compound interest from an initial principal, annual rate, term and regular contributions. View final capital, interest earned, yearly growth and the detailed projection.
This choice applies to every calculator; amounts are not converted.
Your simulation
Enter your parameters, then run the calculation to see how your capital can grow.
Advanced options
Ready to simulate
Enter your parameters and select Calculate. Results, chart and yearly table will appear here.
Capital growth
Track invested amounts, cumulative interest and total value year by year.
Invested amountsCumulative interestTotal value
Yearly growth table
Review the detailed capital growth for each completed year.
| Year | Opening balance | Contributions | Interest for the year | Cumulative interest | Closing balance |
|---|
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How does this tool work?
This compound interest calculator simulates how capital grows when earned interest is reinvested and can itself generate further interest. Add regular contributions if needed, choose their frequency and view invested amounts separately from interest earned.
At each compounding date, interest is added to the balance and can earn further interest. The nominal annual rate is divided by the number of compounding periods: 5% compounded monthly uses 0.05 / 12 per month. This nominal rate is different from an effective annual rate.
At each compounding period, interest is calculated on the capital already accumulated. Previously earned interest therefore increases the base that produces future interest: this is the cumulative effect of compound interest.
Contributions increase the balance at the selected frequency and timing. A contribution at the beginning of a period earns interest longer than the same contribution at the end. The table separates money contributed from interest earned; the ending balance is not investment profit alone.
How to use this tool
Enter principal, rate and term
These three parameters define the main scenario.
Optionally add regular contributions
Advanced options let you specify compounding frequency and contributions.
Run the simulation
Results are displayed after you validate the scenario with the Calculate button.
Analyze the chart and table
Separate the amounts actually invested from the interest generated by compounding.
Compound interest formula
Without regular contributions, future value depends on the initial principal, periodic rate and number of compounding periods.
Future value
FV = PV × (1 + r/m)^(m×n)
The annual rate is distributed according to the compounding frequency.
Interest earned
Interest = Final value − Amount invested
With contributions, the amount invested includes the initial principal and all contributions.
- FV
- future value of the capital
- PV
- initial principal
- r
- annual interest rate as a decimal
- m
- number of compounding periods per year
- n
- term in years
Results are mathematical simulations. They are neither a promise of return nor financial advice.
See the detailed explanationEffect of the parameters
A higher rate accelerates growth, but time often has an even more dramatic effect: the longer capital remains invested, the longer previously earned interest can generate additional interest.
- Higher rate → faster growth
- Longer term → stronger cumulative effect
- Regular contributions → larger invested base
- More frequent compounding → slight gain at the same nominal rate
Simple vs compound interest
Simple interest is calculated on the initial principal. Compound interest reinvests earned interest, so that interest can itself generate new interest over time.
- Simple interest: constant calculation base
- Compound interest: evolving calculation base
Use cases
Project long-term savings
Estimate the future value of capital invested for several years.
Measure the effect of monthly contributions
Compare capital growth with or without regular savings.
Compare rates of return
Observe the impact of different annual rates over the same term.
Understand the effect of time
See why later years can generate more interest than earlier years.
Examples
Invested capital without contributions
10,000 × (1 + 0.05/12)^240 ≈ €27,126.40: all growth comes from compounding the initial principal, and interest ends up exceeding the amount invested.
Input
€10,000 · 5% · 20 years · monthly compoundingResult
Final capital: €27,126.40; interest earned: €17,126.40; return on invested amounts: 171.26%Monthly savings
The 240 contributions add €48,000. The percentage return is lower than in the previous example because recent contributions earn interest for a shorter time.
Input
€10,000 · 5% · 20 years · monthly compounding · +€200/month at the end of each periodResult
Final capital: €109,333.14; total invested: €58,000; interest earned: €51,333.14; return: 88.51%Tips and best practices
- Compare several terms: the effect of compound interest generally becomes more visible over longer horizons.
- Do not confuse theoretical return with guaranteed return: a real investment may fluctuate and include fees or taxes.
- Compounding frequency can slightly change the result at the same nominal rate.
- The return shown here compares interest earned with all amounts actually invested.
Sources and references
Frequently asked questions
What is compound interest?
Interest is compounded when it is added to the principal and can then itself earn interest in later periods.
How is it different from simple interest?
With simple interest, interest is calculated only on the initial principal. With compound interest, the calculation base can grow with interest already earned.
Does compounding frequency change the result?
Yes. At the same nominal rate, more frequent compounding can slightly increase future value because interest is added to the calculation base sooner.
Should contributions be made at the beginning or end of a period?
A contribution made at the beginning of a period generally has one additional period to earn interest compared with the same contribution made at the end.
Are fees and taxes included?
No. This simulation focuses on the mathematical mechanics of compound interest. Fees, taxes, deductions and variations in return are not included.
Does this calculator predict investment returns?
No. It mathematically projects a constant-rate scenario. Actual returns can differ and are not guaranteed.
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