Compound Interest Calculator
Calculate investment growth with compound interest and regular monthly contributions. See year-by-year breakdown of your savings.
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Frequently Asked Questions
How does the Compound Interest Calculator work?
The tool applies the compound interest formula A = P(1 + r/n)^(nt) where P is the principal, r is the annual rate, n is the compounding frequency, and t is time in years. For monthly contributions, it iterates month by month, adding each deposit before applying that period's interest, building a year-by-year breakdown of total deposits versus earned interest.
What is compound interest?
Compound interest is interest earned on both your original deposit and previously earned interest. Over time, this creates exponential growth -- your money earns interest, and then that interest earns interest too.
How do monthly contributions affect the result?
Regular contributions dramatically accelerate growth because each deposit starts earning compound interest immediately. Even small monthly additions make a significant difference over 10-30 years.
What compounding frequency should I use?
Most savings accounts compound daily or monthly. Investment returns are typically quoted as annual rates. The more frequently interest compounds, the slightly higher your effective return, but the difference between monthly and daily is small.