Annually (Once a year)
Quarterly (4 times a year)
Monthly (12 times a year)
Daily (365 times a year)
Please enter valid positive numbers for all fields.
Future Balance:$0.00
Total Contributions:$0.00
Total Interest Earned:$0.00
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 the interest you've already accumulated. Over long periods, this creates a snowball effect that can significantly increase your wealth.
How This Calculator Works
This tool uses the standard compound interest formula with additional monthly contributions. The mathematical logic processes your inputs as follows:
Initial Investment: The starting lump sum you deposit.
Monthly Contribution: Money added to the account at the end of every month.
Interest Rate: The annual percentage yield (APY) you expect to earn.
Compounding Frequency: How often the interest is calculated and added back to your balance (e.g., Monthly or Annually).
Why Start Early?
Time is the most critical factor in compounding. Investing $100 a month starting at age 25 yields significantly more by age 65 than starting at age 35, even if you invest the same total amount of capital. This calculator helps you visualize that gap.
Frequently Asked Questions
Q: Does this include inflation?
No, this calculator shows the nominal future value. To account for purchasing power, you would need to subtract the inflation rate from your expected interest rate.
Q: When are contributions added?
This calculation assumes contributions are made at the end of each month.
function calculateCompoundInterest() {
// 1. Get DOM elements
var initialInput = document.getElementById("cic-initial");
var monthlyInput = document.getElementById("cic-monthly");
var rateInput = document.getElementById("cic-rate");
var yearsInput = document.getElementById("cic-years");
var freqInput = document.getElementById("cic-frequency");
var errorMsg = document.getElementById("cic-error-msg");
var resultsArea = document.getElementById("cic-results-area");
var displayBalance = document.getElementById("cic-result-balance");
var displayPrincipal = document.getElementById("cic-result-principal");
var displayInterest = document.getElementById("cic-result-interest");
// 2. Parse values
var P = parseFloat(initialInput.value); // Principal
var PMT = parseFloat(monthlyInput.value); // Monthly Contribution
var r = parseFloat(rateInput.value) / 100; // Annual Rate (decimal)
var t = parseFloat(yearsInput.value); // Time in years
var n = parseFloat(freqInput.value); // Compound frequency per year
// 3. Validation
if (isNaN(P) || isNaN(PMT) || isNaN(r) || isNaN(t) || P < 0 || PMT < 0 || r < 0 || t 0) {
fvContributions = PMT * (Math.pow((1 + monthlyRate), totalPeriods) – 1) / monthlyRate;
} else {
fvContributions = PMT * totalPeriods;
}
futureValue = fvLumpSum + fvContributions;
totalContributed = P + (PMT * totalPeriods);
} else {
// For Daily, Quarterly, Annually, we use an iterative loop to ensure Monthly Contributions
// interact correctly with the specific compounding schedule.
// We assume contributions happen at the END of the month.
currentBalance = P;
totalContributed = P;
// Determine how much interest accumulates daily/monthly but compounds only on schedule
// Simpler approach for generic calc:
// Loop through every month
var nextCompoundMonth = 12 / n;
var counter = 0;
for (var i = 1; i <= totalMonths; i++) {
// Add monthly contribution
currentBalance += PMT;
totalContributed += PMT;
counter++;
// Check if it's time to compound
// We need to approximate the interest earned in this interval.
// Simple approximation: Interest is calculated on the balance * (r/12) every month,
// but typically 'Compounding Frequency' implies when it is ADDED to principal.
// Let's stick to the precise method used in banking:
// Calculate Effective Annual Rate or Convert rates.
// EASIEST IMPLEMENTATION: Daily compounding loop if n=365, else align.
// Reverting to robust formula approximation for SEO speed/simplicity:
// Treat PMT as if it compounds at the same frequency for the 'PMT' part,
// adjusted for the number of contributions per compound period.
// Let's use the Loop method for absolute clarity.
// We will compound Monthly for interest calculation, but only ADD it based on frequency?
// No, standard is: Balance earns simple interest until compounding event.
// REVISED LOGIC:
// We run a simulation month by month.
// r_monthly_simple = r / 12;
// currentBalance += currentBalance * r_monthly_simple;
// This is monthly compounding.
// If user selects "Annually", interest shouldn't capitalize until month 12.
// Simulation:
}
// Let's reset and use the simulation for ALL frequencies to be consistent.
currentBalance = P;
totalContributed = P;
var accruedInterest = 0;
for (var m = 1; m Compound at m=12, 24…
// Frequency n=4 (Quarterly) -> Compound at m=3, 6…
var monthsBetweenCompounding = 12 / n;
// Using a small epsilon for float comparison or modulus
if (m % monthsBetweenCompounding === 0) {
currentBalance += accruedInterest;
accruedInterest = 0;
}
}
// Add any remaining accrued interest (if period ends before compounding, usually banks pay out accrued)
currentBalance += accruedInterest;
futureValue = currentBalance;
}
// 5. Update Results
var totalInterest = futureValue – totalContributed;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
displayBalance.innerHTML = formatter.format(futureValue);
displayPrincipal.innerHTML = formatter.format(totalContributed);
displayInterest.innerHTML = formatter.format(totalInterest);
// Show results
resultsArea.style.display = "block";
}