Compound Interest Calculator
About Compound Interest Calculator
Compound interest is interest earned on interest already earned. This calculator projects how a starting balance grows over time, optionally with a regular monthly contribution, and lets you set how often the interest compounds.
How compounding is calculated
The balance follows A = P(1 + r/n)^(nt), where P is the starting amount, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years. You can compound annually, semiannually, quarterly or monthly. Monthly contributions are handled separately: each one earns growth only for the time remaining after it is paid in, so an early contribution is worth more than a late one.
Does compounding frequency matter much?
Less than most people assume. At 7%, monthly compounding beats annual compounding by only a few percent over a decade. What genuinely moves the outcome is time and the rate: doubling the years matters far more than moving from quarterly to monthly. Frequency is a detail; duration is the mechanism.
Is this projection in real terms?
No — the result is nominal, ignoring inflation, tax and fees. If your return is 7% while inflation runs at 5%, buying power grows at roughly 2%, not 7%. For a realistic picture, enter the rate net of expected inflation and remember that taxes on gains apply in most jurisdictions.
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