Compound Interest Calculator
See exactly how your money grows over time — no finance degree needed.
Model compound growth with configurable contribution frequency and inflation adjustment.
How compound interest works
Think of compound interest like a snowball rolling downhill. It starts small but picks up more snow with every rotation — your interest earns its own interest, and that keeps growing. The longer you leave it rolling, the bigger it gets. Time is the most powerful ingredient.
That's why starting early matters so much. Even a few extra years can add tens of thousands of dollars to your final balance — not because you contributed more, but because the snowball had more time to roll. The chart above shows exactly this effect.
Compound interest is calculated as A = P(1 + r/n)^(nt) where P is principal, r is annual rate, n is compounding frequency, and t is time in years. More frequent compounding periods result in higher effective annual yield.
The effective annual rate (EAR) = (1 + r/n)^n - 1. For inflation adjustment, real return ≈ nominal return − inflation rate (Fisher equation approximation: (1 + nominal)/(1 + inflation) − 1). The difference between nominal and real returns equals the inflation rate over short periods, but compounds to a significant divergence over long horizons.