Advanced Interest Calculator with Daily Compounding & Contributions
See how much your savings or investments could grow over time with the power of compound interest. Whether you’re starting with a lump sum, making monthly contributions, or both, our calculator shows you a future estimate and breaks down how much of your final balance comes from your contributions versus interest earned.
Compound Interest Calculator
Enter your investment details to project its growth.
How to Use Our Interest Calculator
To project your future balance, simply enter a few key details about your savings plan.
Initial Principal: This is the amount of money you are starting with. If you’re starting from scratch, you can enter $0.
Monthly Contribution: Enter the additional amount you plan to save or invest each month. If you are only investing a one-time lump sum, enter $0 here.
Time Span (in years): This is the investment or savings timeframe. Enter how many years you plan to let your money grow. The longer the timeframe, the more you’ll see the impact of compounding.
Estimated Interest Rate: Your expected annual interest rate or rate of return. For guidance on choosing a realistic number, see our FAQ section below.
Compounding Frequency: Select how often the interest is calculated and added to your balance. For most high-yield savings accounts, this is
Monthly. For estimating investment returns,Annuallyis a common choice.
Understanding Your Growth Potential
The final result shows you the Future Value—the total estimated balance of your account at the end of the time period. More importantly, it breaks down how you got there.
Total Principal: The total amount of money you put in, including your initial principal and all your monthly contributions.
Total Interest Earned: This is the profit. It’s the money your money earned for you through compounding.
Final Balance: The sum of your total principal and the interest earned.
The true power of compounding is best seen over time. Notice how the interest earned each year grows larger than the year before.
Example: $10,000 Initial Principal + $200/month at 6% Interest, Compounded Annually
As you can see, in Year 30, the interest earned in that single year ($16,079.05) is more than your initial investment!
Frequently Asked Questions About Interest
What is the difference between simple and compound interest?
This is the most important concept in personal finance.
Simple Interest is calculated only on the original principal amount.
Compound Interest is “interest on interest.” It is calculated on the principal amount plus all the accumulated interest from previous periods. All modern savings and investment accounts use compound interest.
Concrete Example: You invest $1,000 at 10% for 2 years.
With simple interest, you’d earn $100 in Year 1 and $100 in Year 2. Total interest: $200.
With compound interest, you’d earn $100 in Year 1. In Year 2, you’d earn 10% on the new balance of $1,100, which is $110. Total interest: $210. This small difference becomes enormous over long periods.
What is a realistic interest rate to use?
This depends entirely on where you put your money. Here are some practical estimates as of mid-2025:
High-Yield Savings Accounts (HYSAs): These are FDIC-insured and very safe. Look for rates between 4.0% and 5.0% APY.
Certificates of Deposit (CDs): Also insured and safe. Rates are similar to HYSAs but are fixed for a specific term (e.g., 1 year, 5 years).
Stock Market Investments: For a diversified portfolio like an S&P 500 index fund, the historical average annual return is around 8% to 10%. However, this is not guaranteed. It comes with risk, and the value will fluctuate year to year. For conservative planning, you might use 6% or 7%.
What is the Rule of 72?
The Rule of 72 is a fantastic mental shortcut to estimate how long it takes for an investment to double in value. The formula is:
Example: If you expect an 8% annual return, your money would double in approximately 9 years (). If your savings account pays 4%, it would take about 18 years to double ().
How does compounding frequency affect my earnings?
The more frequently interest is compounded, the faster your money grows. This is because the interest earned is added to your principal more often, so it starts earning its own interest sooner.
Example: $10,000 at 5% for 5 years.
Compounded Annually: $12,762.82
Compounded Monthly: $12,833.59
Compounded Daily: $12,840.03
While the difference is small at first, it becomes more significant with larger principals and longer timeframes.
How does inflation affect my interest earnings?
Inflation is the rate at which the cost of living increases, reducing the purchasing power of your money. To find your “real return,” you must account for inflation.
Formula: Real Return ≈ Interest Rate - Inflation Rate
If your savings account earns 5% interest, but the inflation rate is 3%, your money’s actual purchasing power only grew by about 2%. If inflation is higher than your interest rate, you are losing purchasing power.
Disclaimer: This calculator is for informational and illustrative purposes only and does not constitute financial advice. The results are estimates based on the inputs provided and are not guaranteed.
Plan Your Financial Future
Now that you’ve seen how your savings can grow, define what you’re saving for with our Savings Goal Calculator. To understand how inflation impacts your goals, use our Inflation Calculator to see the future cost of goods. For long-term planning, see how these savings fit into your complete financial picture with our Retirement Calculator.