Free Compound Interest Calculator
Estimate compound interest and investment growth with optional monthly contributions using our free calculator.
When to use this calculator
Compound interest projects how cash grows when earnings reinvest and accrue on a schedule. Owners evaluating equipment leases, reserve accounts, or owner-funded expansion use it to compare against cost of capital. Run it when term length or compounding frequency changes in a lender quote.
Methodology and inputs
Future value applies periodic rate = nominal APR ÷ compounding periods per year, raised to (years × periods). Add periodic contributions at the payment timing your agreement specifies (beginning or end of period).
Worked example
A clinic sets aside $2,500 monthly for 7 years in a reserve earning 4.8% compounded monthly. Ending balance ≈ $234,600 versus $210,000 contributed — $24,600 from compounding. That gap covers roughly one quarter of planned imaging maintenance without new debt.
How to interpret the result
Small rate differences dominate long horizons — verify whether quoted APR is nominal or effective. If contributions stop mid-plan, rerun with actuals; early withdrawals erase compounding tail value.
Reviewed by ZBI Tools · Practical finance and operations calculators for SMB teams.
Further reading
For a deeper walkthrough of the concepts behind this tool, see our guide: Read the full analysis guide.
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Practical questions
Monthly vs annual compounding?
More frequent compounding yields slightly higher effective yield at the same nominal APR — match the account terms.
Should inflation be included?
This tool models nominal growth; discount mentally or rerun with a real rate for decade-long capital plans.
Can I model irregular deposits?
Use uniform contributions as a baseline; irregular flows need period-by-period schedules outside a single lump formula.
How it works
Compound interest (no contributions): A = P × (1 + r/n)^(n×t), where P = principal, r = annual rate (decimal), n = compounds per year, t = years.
With monthly contributions: Future value of initial amount plus future value of the contribution series.
Monthly contributions are assumed to be deposited at the end of each period (ordinary annuity model).
FAQ
What is compound interest?
Interest earned on both the initial principal and on interest already earned.
How do you calculate compound interest?
Use A = P(1 + r/n)^(nt). With regular contributions, add the future value of each contribution.
Why does compounding grow money faster?
Each period you earn interest on the previous balance, so growth accelerates over time.