Compound Interest Calculator

Calculate compound interest with optional recurring contributions and different compounding frequencies.

Initial Amount ($)

Annual Rate (%)

Years

Compounding Frequency

Regular Contribution ($/period)

About This Tool

The Compound Interest Calculator shows how an investment grows over time when interest is earned on both the principal and accumulated interest. It supports five compounding frequencies (annually, semi-annually, quarterly, monthly, and daily) and an optional regular contribution added each compounding period.

Formula: A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate, n is the number of compounding periods per year, and t is time in years. With regular contributions C per period: total = P(1+r/n)^(nt) + C × [(1+r/n)^(nt) − 1] / (r/n). Daily compounding yields slightly more than monthly due to more frequent interest credits.

How to Use

Enter the Principal (initial investment amount).
Enter the Annual Interest Rate as a percentage.
Set the Time Period in years.
Select the Compounding Frequency (annually, semi-annually, quarterly, monthly, or daily).
Optionally enter a Regular Contribution per period.
Click Calculate to see the final balance, total contributions, and interest earned.

Use Cases

Investors use this tool to model long-term savings account growth or retirement fund projections. Students learning personal finance use it to visualize the power of compounding over decades. Financial planners demonstrate to clients why starting early maximizes lifetime returns. Savers compare the effect of different compounding frequencies offered by various banks to choose the best savings product.

FAQ

What is the difference between simple and compound interest? — Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus accumulated interest.
Which compounding frequency earns the most? — Daily compounding earns slightly more than monthly, which earns more than annual — but the differences are small for typical rates.
What does "regular contribution" mean? — An amount added each compounding period (e.g., monthly deposit into a savings account). It dramatically increases the final balance over long periods.