Finance & business
Compound Interest Calculator
How to use this tool
- 1
Enter the starting balance and the regular contribution.
- 2
Set the annual rate, compounding and term.
- 3
Optionally add annual inflation.
- 4
Read the final balance, the chart and the year-by-year table.
Help
- Enter the starting balance, a regular contribution (monthly, quarterly, semi-annual or annual), the annual rate and the term: the final balance, total contributed and interest earned show live.
- Choose how interest compounds (annually to daily): the tool derives the effective annual rate. Also choose whether contributions are made at the start or end of each period (start earns slightly more).
- Enter an annual inflation rate to see the final value in today's purchasing power next to the nominal amount.
- The maths uses fixed-point arithmetic (50 decimals) and is rounded to the cent only for display; the yearly table rows add up exactly.
- Indicative simulation: real returns vary, are not guaranteed, and fees and taxes are not included.
Frequently asked questions
What is compounding?
It means the interest you earn itself earns interest. The more frequent the compounding (monthly rather than annual), the higher the effective rate: 12% compounded monthly equals 12.68% a year.
Contributions at the start or end of the period: what is the difference?
A contribution made at the start of a period earns one more period of interest than one made at the end. Over 20 years at 6% with 200 a month, the difference is about 0.5% of the final balance.
Why show a “real” value?
Because 100,000 in 20 years will not buy what it buys today. With 2.5% annual inflation it is worth about 61,000 in today's purchasing power. The real value gives you the useful order of magnitude.
Written and verified by the MaxyTools team · Updated on
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