Please enter valid positive numbers in all fields.
Total Principal Invested:$0.00
Total Interest Earned:$0.00
Future Investment Value:$0.00
function calculateCompoundInterest() {
// Get input values using var
var p = parseFloat(document.getElementById('initialDeposit').value);
var pmt = parseFloat(document.getElementById('monthlyContribution').value);
var r = parseFloat(document.getElementById('interestRate').value);
var t = parseFloat(document.getElementById('investmentYears').value);
var n = parseFloat(document.getElementById('compoundFreq').value);
var errorDiv = document.getElementById('errorDisplay');
var resultDiv = document.getElementById('ciResults');
// Validation
if (isNaN(p) || isNaN(pmt) || isNaN(r) || isNaN(t) || p < 0 || pmt < 0 || r < 0 || t <= 0) {
errorDiv.style.display = "block";
resultDiv.style.display = "none";
return;
}
errorDiv.style.display = "none";
// Convert rate to decimal
var rateDecimal = r / 100;
// Logic for Compound Interest with Monthly Contributions
// Formula: FV = P * (1 + r/n)^(n*t) + PMT * [ (1 + r/n)^(n*t) – 1 ] / (r/n)
// Note: This assumes contributions are made at the end of each compounding period if frequency matches.
// For simplicity in this specific calculator, if frequency is not monthly (12), we approximate contributions logic or force monthly compounding for contributions.
// To be strictly accurate for varied compounding vs monthly contributions, the math is complex.
// Standard approximation: We will treat 'n' as the compounding frequency for the Principal.
// For the monthly contributions, we will assume they compound at the same frequency 'n' effectively,
// but strictly speaking, we calculate the Future Value of the Initial Deposit and the Future Value of the Series separately.
var totalMonths = t * 12;
var futureValue = 0;
var totalInvested = p + (pmt * totalMonths);
// 1. Future Value of Initial Deposit
// A = P(1 + r/n)^(nt)
var fvPrincipal = p * Math.pow(1 + (rateDecimal / n), n * t);
// 2. Future Value of Monthly Contributions
// If compounding is Monthly (n=12), standard annuity formula applies: PMT * (((1 + r/n)^(nt) – 1) / (r/n))
// If compounding is Annually but contribution is Monthly, we effectively calculate interest monthly?
// For this specific tool, we will assume standard Monthly Compounding (n=12) is the primary use case,
// but if user selects Annual (n=1), we calculate the FV of the series based on effective annual rate equivalent or simplify.
// Let's implement an iterative loop for perfect accuracy regardless of frequency mismatch
// This handles cases where contribution frequency (monthly) != compounding frequency
var currentBalance = p;
var monthsPassed = 0;
for (var i = 1; i <= totalMonths; i++) {
// Add monthly contribution
currentBalance += pmt;
// Apply interest if a compounding period has passed
// n is times per year. 12/n is months per period.
var monthsPerCompound = 12 / n;
if (i % monthsPerCompound === 0) {
var periodRate = rateDecimal / n;
currentBalance = currentBalance * (1 + periodRate);
}
}
// In the iterative approach, interest is applied at end of period.
// Note: The loop adds PMT then compounds. This is "Contribution at beginning of month" effectively if compounded immediately,
// or we need to align carefully.
// Let's stick to the standard formula approach assuming n=12 (Monthly) for the most common use case to ensure speed and standard expectation.
if (n === 12) {
// Standard Monthly Compounding Formula
var monthlyRate = rateDecimal / 12;
var fvSeries = pmt * (Math.pow(1 + monthlyRate, totalMonths) – 1) / monthlyRate;
futureValue = fvPrincipal + fvSeries;
} else {
// Fallback to iterative for Quarterly/Annual to be safe
currentBalance = p;
for (var j = 0; j < totalMonths; j++) {
// Add contribution
currentBalance += pmt;
// Compound Interest? Only at specific intervals.
// Actually, standard banks compound daily or monthly.
// Let's use simple approximation: Calculate Effective Annual Rate?
// Let's stick to the iterative for non-monthly to ensure the code logic is robust.
// Add Interest for this month (using simple interest for fractional periods if needed, or effective rate)
// Better approach for calculator simplicity:
// Convert nominal annual rate to effective monthly rate: (1 + r/n)^(n/12) – 1
var effectiveMonthlyRate = Math.pow(1 + (rateDecimal/n), n/12) – 1;
currentBalance = currentBalance * (1 + effectiveMonthlyRate);
}
futureValue = currentBalance;
}
var totalInterest = futureValue – totalInvested;
// Display Results
document.getElementById('resPrincipal').innerHTML = formatCurrency(totalInvested);
document.getElementById('resInterest').innerHTML = formatCurrency(totalInterest);
document.getElementById('resTotal').innerHTML = formatCurrency(futureValue);
resultDiv.style.display = "block";
}
function formatCurrency(num) {
return num.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
}
Understand the Power of Compound Interest
Compound interest is often referred to as the "eighth wonder of the world." Unlike simple interest, where you only earn money on your principal investment, compound interest allows you to earn interest on your interest. This creates a snowball effect that can significantly grow your wealth over time.
Whether you are saving for retirement, a down payment on a house, or your child's education, understanding how different variables affect your growth is crucial. Even small differences in interest rates or starting early can lead to massive differences in your final balance.
How to Use This Calculator
This tool is designed to help you project the future value of your investments. Here is how to interpret the fields:
Initial Investment: The amount of money you are starting with today.
Monthly Contribution: How much you plan to add to your investment every month. Regular contributions are key to long-term growth.
Annual Interest Rate: The expected yearly return on your investment (e.g., the stock market historically averages around 7-10%).
Years to Grow: The duration you plan to keep the money invested.
Compounding Frequency: How often the interest is calculated and added back to the principal. Monthly is standard for most savings accounts and investment projections.
The Formula Behind the Math
While this calculator handles the heavy lifting, the core concept relies on the mathematical formula for future value:
FV = P(1 + r/n)^(nt)
Where P is the principal, r is the annual interest rate, n is the number of times interest compounds per year, and t is the time in years. When you add monthly contributions, the math becomes a series calculation, aggregating the growth of every individual contribution over time.