Calculate how your investments grow over time with the power of compounding.
Monthly (Standard)
Annually
Quarterly
Daily
Total Principal Invested:$0.00
Total Interest Earned:$0.00
Future Portfolio Value:$0.00
function calculateGrowth() {
// 1. Get Input Values
var initialPrincipal = parseFloat(document.getElementById('inv_initial').value);
var monthlyContrib = parseFloat(document.getElementById('inv_monthly').value);
var interestRate = parseFloat(document.getElementById('inv_rate').value);
var years = parseFloat(document.getElementById('inv_years').value);
var compoundFreq = parseFloat(document.getElementById('inv_compound').value);
// 2. Validate Inputs
if (isNaN(initialPrincipal)) initialPrincipal = 0;
if (isNaN(monthlyContrib)) monthlyContrib = 0;
if (isNaN(interestRate)) interestRate = 0;
if (isNaN(years) || years <= 0) {
alert("Please enter a valid number of years.");
return;
}
// 3. Calculation Logic
// Rate needs to be decimal
var r = interestRate / 100;
// n is compounding frequency
var n = compoundFreq;
// t is years
var t = years;
// Formula Part 1: Future Value of Initial Principal
// A = P(1 + r/n)^(nt)
var fvPrincipal = initialPrincipal * Math.pow((1 + (r / n)), (n * t));
// Formula Part 2: Future Value of Contributions
// Note: This standard formula assumes contributions are made at the END of each compounding period.
// For simplicity and standard user expectation, if frequency is monthly (12), we treat contributions as monthly.
// If frequency is Annual (1), monthly contributions need to be annualized or formula adjusted.
// To keep this robust for this specific specific calculator:
// We will approximate strictly based on the Compounding Frequency matching the Contribution Frequency
// OR we simply iterate to ensure accuracy if they mismatch, but for this code we assume
// the user inputs align or we use a standard loop for precision.
// Iterative approach is safest for mixed frequencies (e.g. Monthly add, Daily compound)
var currentBalance = initialPrincipal;
var totalContributed = initialPrincipal;
var months = t * 12;
// Convert rate to monthly for iteration or use specific daily logic?
// Let's use a standard iteration loop for maximum accuracy across different compounding types vs monthly deposits.
for (var i = 1; i <= months; i++) {
// Add monthly contribution
currentBalance += monthlyContrib;
totalContributed += monthlyContrib;
// Apply interest?
// Interest is applied n times per year.
// If n=12 (monthly), apply every month.
// If n=1 (annually), apply every 12th month.
// If n=365 (daily), apply (365/12) times per month roughly.
// Precise Math Method:
// Calculate effective monthly rate based on compounding frequency
// Effective Monthly Rate = (1 + r/n)^(n/12) – 1
var effectiveMonthlyRate = Math.pow((1 + r/n), (n/12)) – 1;
currentBalance = currentBalance * (1 + effectiveMonthlyRate);
}
// 4. Calculate Totals
var totalValue = currentBalance;
var totalInterest = totalValue – totalContributed;
// 5. Output Formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// 6. Update DOM
document.getElementById('res_principal').innerHTML = formatter.format(totalContributed);
document.getElementById('res_interest').innerHTML = formatter.format(totalInterest);
document.getElementById('res_total').innerHTML = formatter.format(totalValue);
document.getElementById('results_box').style.display = 'block';
}
Understanding 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 both your initial money and the interest you've already accumulated. This creates a snowball effect that can significantly accelerate your wealth generation over long periods.
How This Calculator Works
Our Investment Compound Interest Calculator uses standard financial formulas to project the future value of your portfolio. Here is a breakdown of the inputs:
Initial Principal: The amount of money you are starting with today.
Monthly Contribution: The amount you plan to add to your investment account every month. Regular contributions are key to dollar-cost averaging and building wealth.
Annual Interest Rate: The expected yearly return on your investment. The stock market (S&P 500) has historically returned about 7-10% annually after inflation adjustment.
Compounding Frequency: How often the interest is calculated and added back to your balance. "Monthly" is the standard for most savings accounts and dividend reinvestment plans.
The Impact of Time on Investing
The most critical variable in the compound interest formula is Time (Years). Because the exponential growth happens at the end of the curve, starting even 5 years earlier can double your eventual outcome. For example, investing $500/month at 8% for 30 years yields roughly $745,000. Waiting just 10 years to start (investing for 20 years) yields only roughly $296,000.
Example Scenario
Let's say you are 25 years old and want to retire at 65. You have $5,000 saved and can afford to invest $400 a month into a diversified index fund expecting an 8% annual return.
Principal: $5,000
Monthly Contribution: $400
Time: 40 Years
Result: Over $1.4 Million Dollars
In this scenario, you only contributed $197,000 of your own money. The remaining $1.2 million came entirely from compound interest.