Compound Interest Calculator
Project your savings and investment growth with recurring monthly contributions and custom compounding intervals. View annual breakdown tables in real time.
📊 Year-by-Year Wealth Accumulation Schedule
| Year | Starting Balance | Annual Deposits | Interest Earned | Ending Balance |
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The Mathematics of Compound Growth & Wealth Accumulation
Compound interest represents one of the most powerful financial forces in wealth accumulation. When interest earnings are continuously reinvested rather than withdrawn, each subsequent compounding period generates returns on a progressively larger capital base, producing an exponential growth curve over decades.
Standard Formula Reference
Principal Compounding
A = P(1 + r/n)^(nt)
P = Principal, r = Annual rate, n = Frequency, t = Years
Future Value of Series
FV = PMT × [((1 + r/n)^(nt) - 1) / (r/n)]
Calculates growth of recurring monthly contributions
Rule of 72
Years to Double ≈ 72 / Rate
At 8% ROI: 72 / 8 = 9 Years to double investment
Frequently Asked Questions
What is compound interest and how does it work?
Compound interest is interest calculated on the initial principal AND on all accumulated interest from prior periods. Unlike simple interest which only earns returns on the original deposit, compound interest creates exponential wealth growth over long investment horizons.
What is the standard compound interest formula with monthly deposits?
For a lump-sum principal, the formula is A = P(1 + r/n)^(nt), where P is principal, r is annual interest rate, n is compounding frequency per year, and t is time in years. When regular monthly contributions (PMT) are added, future value is calculated by adding the future value of an annuity formula.
What is the Rule of 72?
The Rule of 72 is a quick financial mental shortcut to estimate how many years it will take for your investment to double at a fixed annual interest rate (Years to Double ≈ 72 ÷ Annual Interest Rate). For example, at an 8% annual return, an investment doubles in approximately 9 years (72 ÷ 8 = 9).
How does compounding frequency (monthly vs annually) affect returns?
More frequent compounding periods (e.g. monthly or daily vs annually) generate slightly higher effective annual yields (APY) because interest is credited and begins earning returns sooner.
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