FinanceReviewed Methodology
Compound Interest Calculator
$10,000 invested at 7% compounded annually grows to about $19,672 in 10 years, nearly doubling with no extra deposits. This compound interest calculator estimates future value based on principal, interest rate, time period, compounding frequency, and optional recurring contributions.
Quick answer
Compounding frequency affects growth rate.
What this tells you
- •Compounding frequency affects growth rate.
- •Recurring contributions increase future value over time.
- •Total interest is future value minus total invested amount.
How to Use
- 1Enter your starting principal amount.
- 2Enter annual interest rate and investment period in years.
- 3Select compounding frequency.
- 4Optionally add contribution amount per compounding period.
- 5Calculate to view projected future value and interest earned.
How It Works
Formula
FV = P(1 + r/n)^(nt) + PMT * [((1 + r/n)^(nt) - 1) / (r/n)]The first term grows the initial principal. The second term adds the future value of recurring contributions.
Calculation note: values are processed in the order shown above, using the current input units.
Worked Examples
Monthly compounding with contributions
Principal$5,000
Annual rate8%
Years5
CompoundingMonthly
Contribution per month$200
Result$20,430.84 projected value
Common mistakes
- Entering annual contribution as monthly contribution
- Using percentage as decimal (enter 8 not 0.08)
- Ignoring that projection assumes constant rate
Limitations
This estimate assumes a fixed annual rate and fixed contribution pattern over time. It does not model taxes, fees, inflation, or changing market returns.
Frequently Asked Questions
Match the frequency used by your account or investment product.
Yes. Set contribution amount to zero if you do not contribute regularly.
No. It is a projection based on fixed rate assumptions.
Divide 72 by your annual return to estimate the years needed. At 7% growth, money doubles in roughly 10 years (72 / 7 = 10.3). This rule of 72 shortcut works best for rates between about 4% and 12%.
Simple interest pays only on the original principal. Compound interest pays on the principal plus all interest already earned, so the balance grows faster the longer the money stays invested.
It estimates compound interest calculator outputs using the visible inputs and formula assumptions on this page.