Compound Interest Calculator
See how your money grows with compound interest and regular contributions over time.
How Compound Interest Works
Compound interest is interest calculated on both the initial principal and all previously accumulated interest. The formula A = P(1 + r/n)^(nt) + PMT x [((1 + r/n)^(nt) - 1) / (r/n)] accounts for both the initial investment growing and regular contributions compounding over time. This is the engine behind long-term wealth building.
The power of compound interest grows dramatically over time. For example, investing $500 per month at 8% annual return for 30 years results in about $745,000 — but your total contributions are only $180,000. The remaining $565,000 is pure interest. Starting early and contributing consistently are the two most important factors in building wealth through compound interest.