How it works
Compound growth applies each period’s rate to the accumulated balance. Simple interest applies a rate only to the original principal. This model compounds the initial balance and each contribution for the time it is invested.
The formula
Keep currency, units and time periods consistent. Percentage inputs use percentage points (enter 5 for 5%). Results are rounded only for display; tiny nonzero values may use scientific notation. Undefined ratios are shown as unavailable.
$10,000 at a 7% nominal annual assumption, compounded monthly for 10 years, plus $200 at each month-end: $54,713.58 ending value, $34,000 cash contributed and $20,713.58 modeled growth.
Calculation method
The entered annual rate is nominal: a 7% rate compounded monthly uses 7% ÷ 12 each month. If contribution and compounding frequencies differ, the equivalent contribution-period rate preserves that same growth factor. Beginning contributions receive one extra period of growth.
Interpretation
Cash contributed includes your initial investment and all scheduled deposits. Modeled growth is the remainder, which may be negative. The year table displays a smooth constant-rate scenario, not a predicted market path.
Limitations
Only completed contribution periods create deposits; any remaining fraction of a period compounds the existing balance. The optional inflation view discounts the ending value into today’s purchasing power. No rate, inflation level or return is guaranteed.
Method and reference sources
Method and content checked 2026-09-20. These sources provide background, not endorsement or professional certification. The formula and limitations above define this calculator.
- Investor.gov — Compound Interest CalculatorInitial balance, contributions, assumed interest and compounding frequency. Constant returns are an assumption, not a market forecast.
- Investor.gov — Understanding FeesInvestment fee and compounding context; enter the terms of your fund or account.
Frequently asked questions
How does contribution timing affect the result?
A contribution made at the beginning of a period receives one more period of growth than an end-of-period contribution. Use the timing and compounding frequency that match your scenario.
What is a worked example for Compound Interest?
$10,000 at a 7% nominal annual assumption, compounded monthly for 10 years, plus $200 at each month-end: $54,713.58 ending value, $34,000 cash contributed and $20,713.58 modeled growth.