Compound Interest Calculator

Calculate your investment's future value, total interest accumulated, and wealth multiplier with recurring monthly contributions and custom compounding intervals.

Investment Parameters
8.0%
Projected Wealth & Returns
Total Future Balance
$113,873
+$43,873 Total Interest
Total Principal Invested
$70,000
Total Interest Earned
$43,873
Wealth Multiple: Your money grows by 1.63x over the investment period.

The Mathematics of Compound Interest

Compound interest is the process where interest is credited on both the original principal and the previously accumulated interest. Albert Einstein famously referred to compound interest as the eighth wonder of the world.

1. The Universal Compound Interest Formula

For an initial principal $P$, annual rate $r$, compounded $n$ times per year over $t$ years with regular monthly contributions $PMT$:

$$A = P \left(1 + \frac{r}{n}\right)^{nt} + PMT \times \frac{\left(1 + \frac{r}{n}\right)^{nt} - 1}{\frac{r}{n}}$$

2. Frequency Effects

The more frequently interest is compounded (e.g. daily vs annually), the higher the Effective Annual Rate (EAR) and the greater the final yield due to exponential compounding.