Is this the same as APY?

Not exactly — APY already folds compounding frequency into one annualized number. This calculator lets you set the nominal rate and frequency separately so you can see the effect directly.

Does this account for inflation or taxes?

No — the projection is in nominal (today's) dollars, before any taxes on gains. Real purchasing power will be lower after inflation.

What does the compounding frequency actually change?

More frequent compounding (daily vs. annually) means interest is calculated and added to the balance more often, so it starts earning its own interest sooner — the effect is real but usually modest compared to changing the rate or the time horizon.

Is a higher rate or more time more powerful for growth?

Time, generally — because compounding is exponential, each additional year of growth adds more than the year before it. Starting earlier with a modest rate often outperforms starting later even with a notably higher one.

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Finance

Compound Interest

Growth of a lump sum with optional monthly contributions.

🔒 Runs entirely in your browser — nothing here is ever uploaded

About the Compound Interest

Projects how a balance grows over time when interest is earned on both your original deposit and previously earned interest, with optional recurring monthly contributions.

How to use it

Enter your Initial principal and Annual rate (%).
Enter the number of Years and choose a Compounding frequency.
Optionally enter a Monthly contribution.
Read your projected future value, total contributed, and interest earned in the result panel and chart.

Formula

A = P(1 + r/n)^(nt)
plus the future value of any monthly contribution series added on top

The standard compound-interest formula, as explained in the U.S. SEC's Investor.gov educational materials — A is the future balance, P the principal, r the annual rate, n the compounding frequency per year, and t the number of years.

Worked example

$10,000 invested at 7% annually for 15 years, compounded monthly, grows to about $28,300 with no further contributions — or roughly $50,700 with an added $100/month throughout.

Recommendations

• Starting early usually beats contributing more later — time in the market compounds more than timing.
• Even small recurring contributions add up significantly over long horizons thanks to compounding.
• Compare monthly vs. annual compounding on the same numbers to see how much the frequency actually matters.

Frequently asked questions

More frequent compounding means interest starts earning its own interest sooner, so the same nominal rate yields slightly more the more often it compounds.

Related tools

Simple Interest Calculator

Investment ROI Calculator

Retirement Calculator

Sources

Investor.gov (U.S. SEC) — What is compound interest? — accessed 2026-08-20

Disclaimer

Illustrative estimate only, not financial or tax advice. Verify figures with a licensed adviser or your local tax authority.