How does compound interest work?
Compound interest pays interest on both your original money and the interest it has already earned. Because each period's interest joins the balance, growth accelerates over time — the longer the horizon, the larger the effect.
What is the compound interest formula?
The balance is A = P(1 + r/n)nt, where P is the
principal, r the annual rate, n the times it compounds per year, and t the
number of years. Regular deposits add an annuity term on top, which this
calculator includes automatically.
How do regular contributions change the result?
Adding a fixed amount every period dramatically increases the final balance, and a growing share of it becomes interest rather than your own deposits. The bar above splits the future value into contributions versus interest earned.
Is this financial advice?
No. It's a math estimate that ignores fees, taxes, and inflation, and assumes a constant rate. Real returns vary. Use it to compare scenarios, not as a guarantee.
Common use cases
- Projecting a savings account or investment over many years.
- Seeing the impact of starting earlier or saving more each month.
- Comparing annual, monthly, and daily compounding.