Calculate how your investments grow over time with the power of compounding.
Annually
Quarterly
Monthly
Daily
Projection Results
Future Value:
Total Principal Invested:
Total Interest Earned:
Understanding Compound Interest
Compound interest is often referred to as the "eighth wonder of the world." Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal amount and also on the accumulated interest of previous periods. This essentially means "interest on interest," leading to exponential growth of your wealth over time.
The Rule of 72: A quick way to estimate how long it will take for your investment to double is to divide 72 by your annual interest rate. For example, at a 8% return, your money doubles in approximately 9 years (72 / 8 = 9).
How This Calculator Works
Our Compound Interest Calculator uses the standard financial formula for the future value of a series of payments. It considers four key variables:
Initial Investment (P): The starting amount of money you invest.
Monthly Contribution (PMT): Additional money you add to the investment at the end of every month.
Interest Rate (r): The expected annual rate of return (e.g., stock market average is historically around 7-10%).
Compounding Frequency (n): How often the interest is calculated and added back to the principal. More frequent compounding leads to higher returns.
Realistic Example
Let's say you are 25 years old and start investing for retirement. You begin with an initial deposit of $5,000.
You decide to contribute $300 every month from your paycheck.
Assuming a conservative market return of 7% annually, compounded monthly, here is what happens after 35 years (when you turn 60):
Total Amount Invested: $131,000
Total Interest Earned: $442,500
Final Balance: $573,500
Notice that the interest earned is more than triple the amount of money you actually put in. This is the power of time and compounding working together.
Why Start Early?
Time is the most critical factor in compounding. A delay of just 5-10 years can drastically reduce your final outcome. Starting small today is mathematically superior to starting big tomorrow. Use the calculator above to adjust the "Years" field and see how adding just 5 extra years impacts your total interest earned.
function calculateCompoundInterest() {
// 1. Get input values
var p = parseFloat(document.getElementById('initialPrincipal').value);
var pmt = parseFloat(document.getElementById('monthlyContribution').value);
var r = parseFloat(document.getElementById('interestRate').value);
var t = parseFloat(document.getElementById('yearsToGrow').value);
var n = parseFloat(document.getElementById('compoundingFreq').value);
// 2. Validate inputs
if (isNaN(p) || p < 0) p = 0;
if (isNaN(pmt) || pmt < 0) pmt = 0;
if (isNaN(r) || r < 0) r = 0;
if (isNaN(t) || t <= 0) t = 1; // Minimum 1 year for logic
if (isNaN(n)) n = 12;
// 3. Calculation Logic
// Convert percentage to decimal
var rateDecimal = r / 100;
// Future Value of the Initial Principal
// Formula: FV = P * (1 + r/n)^(n*t)
var fvPrincipal = p * Math.pow((1 + (rateDecimal / n)), (n * t));
// Future Value of the Series of Contributions (PMT)
// Since PMT is monthly, we need to be careful if n (compounding) != 12.
// For strict accuracy in a simple JS calculator without complex annuity due formulas for mismatched periods:
// We will simulate the cash flow loop for highest accuracy across different frequencies.
var totalMonths = t * 12;
var currentBalance = p;
var totalPrincipal = p;
// Iterate through every month
for (var i = 1; i <= totalMonths; i++) {
// Add monthly contribution
currentBalance += pmt;
totalPrincipal += pmt;
// Apply Interest
// We need to apply the effective interest for one month.
// If compounding is Daily (365), Monthly rate approx is (1+r/365)^(365/12) – 1
// Simple approach: Effective Annual Rate converted to monthly.
// Or simply: Add interest based on frequency.
// To be precise with the dropdown selection:
// Let's stick to the direct Loop strategy aligning with compounding moments.
// Actually, the loop below is the robust way to handle "Monthly Contributions" mixed with "Daily/Monthly/Yearly Compounding":
// However, doing a loop for daily compounding over 30 years is expensive (10,000+ iterations).
// Optimization: Use formula for Future Value of an Annuity if n=12.
// Let's use the formula approach for standard cases to ensure speed,
// but we must handle the PMT frequency (12/yr) vs Compounding Frequency (n/yr).
// Formula for Future Value of Annuity with PMT made at end of each period:
// FV = PMT * [ (1 + r/n)^(n*t) – 1 ] / (r/n)
// THIS ONLY WORKS if Payment Frequency matches Compounding Frequency.
// If they don't match (e.g. Monthly contributions, Daily compounding), it's complex.
// For this specific SEO tool, we will assume standard "Monthly Compounding" for the PMT part
// OR simply calculate interest monthly for the loop.
// Let's use a hybrid approximation which is standard for these web calculators:
// Treat the interest addition as monthly for the loop (simplest user expectation).
// recalculate logic:
}
// REVISED LOGIC FOR ROBUSTNESS:
// We will assume Contributions are added monthly.
// We will accrue interest according to the selected frequency.
var simBalance = p;
var simTotalContributed = p;
var daysInYear = 365;
var currentDay = 0;
var totalDays = t * 365;
// Since looping days is too heavy, let's loop months.
// Logic: Iterate months. Add PMT. Add (Balance * (Rate/12)) IF Compounding is Monthly.
if (n === 12) {
// Standard Monthly Compounding
var monthlyRate = rateDecimal / 12;
var months = t * 12;
var balance = p;
for(var k=0; k<months; k++) {
// Interest earned this month on start balance
var interest = balance * monthlyRate;
balance += interest;
// Add contribution at end of month
balance += pmt;
}
// Adjustment: total principal
totalPrincipal = p + (pmt * months);
fvPrincipal = balance; // reusing variable name for final result
}
else {
// For Daily (365), Quarterly (4), Annually (1) with Monthly PMT
// We will use a monthly loop, but only apply interest when the compounding period triggers.
// This is slightly distinct but accurate to how banks post interest.
var balance = p;
var months = t * 12;
var compoundInterval = 12 / n; // e.g., Quarterly = 3 months.
var accumulatedInterest = 0;
// Loop through months
for(var m=1; m <= months; m++) {
// Add Monthly Contribution first? Or End? usually End.
// Let's calculate interest on the balance BEFORE contribution for this period?
// Standard: Balance sits for a month.
// Effective monthly rate based on compounding freq?
// No, simple interest accrues, then compounds.
// Let's use the simplified formula approach for non-monthly to avoid confusion.
// FV = P(1+r/n)^(nt) + PMT * ( (1+r/n)^(nt) – 1 ) / ( (1+r/n)^(n/12) – 1 )
// This is the generalized Annuity formula where PMT freq != Compounding freq.
var r_n = rateDecimal / n;
var total_periods = n * t;
var term1 = p * Math.pow(1 + r_n, total_periods);
var effective_rate_per_payment_period = Math.pow(1 + r_n, n / 12) – 1;
var term2 = 0;
if (effective_rate_per_payment_period !== 0) {
term2 = pmt * (Math.pow(1 + r_n, total_periods) – 1) / effective_rate_per_payment_period;
} else {
term2 = pmt * total_periods; // If 0 interest
}
fvPrincipal = term1 + term2;
totalPrincipal = p + (pmt * months);
break; // Formula calculates all at once
}
}
// 4. Calculate Final Numbers
var finalBalance = fvPrincipal;
var totalInterest = finalBalance – totalPrincipal;
// 5. Format Output
// Using toLocaleString for currency formatting
function formatMoney(num) {
return "$" + num.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
}
document.getElementById('displayTotal').innerHTML = formatMoney(finalBalance);
document.getElementById('displayPrincipal').innerHTML = formatMoney(totalPrincipal);
document.getElementById('displayInterest').innerHTML = formatMoney(totalInterest);
// 6. Show Results Section
document.getElementById('results').style.display = 'block';
}