Compound Interest Calculator

How to use the compound interest calculator

1. Enter the Initial amount you invest today. It can be 0 if you only make regular contributions.
2. Enter the Annual interest rate (%), the expected yearly return, for example 5.
3. Enter the number of Years.
4. Choose the Compounding: Annually, Semi-annually, Quarterly, Monthly, Daily (365) or Continuously.
5. Optionally add a Regular contribution and its Contribution frequency (monthly, bi-weekly, weekly, quarterly or annually).
6. Under Contributions made at, choose End of each period (the usual case for savings deposited after payday) or Start of each period (money invested right away earns one more period of interest).

The tool shows the Final balance, the Total contributions, the Total interest and the Effective annual rate. The chart, Balance by year, stacks what you put in (Contributions) and what the money earned (Interest); hover or focus a bar to read that year’s figures. The Year-by-year growth table gives the same numbers in detail and Download CSV exports them.

The compound interest formula

Compound interest means interest is added to the balance and then earns interest itself. For a single deposit:

A = P × (1 + r/m)^(m×t)

where P is the initial amount, r the annual rate, m the number of compounding periods per year and t the number of years. $1,000 at 5% compounded annually for 10 years grows to $1,628.89; compounded daily, to $1,648.66. With continuous compounding the formula becomes A = P × e^(r×t).

Regular contributions add the future value of an annuity:

FV = C × ((1 + i)^n − 1) / i

where C is the contribution, i the rate per contribution period and n the number of contributions. Contributions made at the start of each period are multiplied by (1 + i) once more. With the default example (10,000 to start, 200 a month, 5% compounded monthly for 20 years), the balance reaches about 109,333: 58,000 contributed and about 51,333 of interest.

When contributions and compounding don’t match

If you contribute monthly but interest compounds annually, the tool uses the equivalent rate per contribution period, i = (1 + r/m)^(m/p) − 1, where p is the number of contributions per year. This way the effective annual return stays exactly the one you chose. Open How it was calculated to see the rate per period and the formulas with your numbers.

Effective annual rate

The Effective annual rate (also called APY or EAR) is the yearly return after compounding: (1 + r/m)^m − 1. A 5% rate compounded monthly is an effective 5.1162% a year. It lets you compare offers that compound at different frequencies.

Limits of the projection

The calculation assumes a constant rate for the whole period. Real investments go up and down, and fees, taxes and inflation reduce the real return. Registered accounts such as a TFSA or RRSP change the tax treatment but not the math shown here. Treat the result as a projection, not a promise.