Compound Interest Calculator
Calculate the future value of your investments with compound interest. See how regular monthly contributions grow over time.
What is Compound Interest?
Compound interest is the addition of interest to the principal sum of a loan or deposit — in other words, interest on interest. It is the result of reinvesting interest rather than paying it out, so that interest in the next period is earned on the principal sum plus previously accumulated interest. Compound interest is a fundamental concept in finance and economics.
The formula for compound interest is: A = P(1 + r/n)nt, where:
- A = the future value of the investment
- P = the principal investment amount
- r = the annual interest rate (decimal)
- n = the number of times interest is compounded per year
- t = the number of years the money is invested
How to Use This Calculator
Enter your starting investment amount, how much you plan to contribute each month, the number of years you will invest, and the expected annual return rate. The calculator instantly shows what your investment could grow to over time.
Example: Retirement Savings
The default values show a common retirement savings scenario: contributing $250 per month into a diversified index fund (like VTSAX or VFINX) with an average 8% annual return over 30 years. Starting from nothing, this strategy could grow to over $350,000. Starting early is the single most powerful factor in building long-term wealth through compound interest.