How the compound interest calculator works

This calculator shows how an amount grows when the interest earned in each period is added to the balance and starts earning interest too. You enter an initial value, a regular payment made every period, the interest rate per period and the number of periods. Use it to plan savings or investments, to understand the effect of time and regular contributions, or to compare how the same amount would grow under different rates. The table lists every period, and the chart shows total value, accumulated inflation and net value.

In each period the interest is the previous total multiplied by the rate, and the new total is previous total + payment + interest. Without payments this is the classic formula M = C × (1 + i)^n; with regular payments the future value is FV = PV × (1 + i)^n + PMT × ((1 + i)^n − 1) / i. The rate and the number of periods must use the same unit. To convert an effective annual rate to a monthly one use (1 + ia) = (1 + im)^12, never a simple division by 12. If you enter inflation, its percentage is applied to each period's total and the accumulated amount is subtracted, giving an approximate net value.

Example: start with 1,000 and add 100 at the end of every month for 12 months at 1% a month. The gross total is 2,395.08: 2,200 came from your own deposits and 195.08 from interest. With 0.4% monthly inflation the net value falls to about 2,311.46, an estimate of what that money could buy in today's terms. Past or assumed rates are not a promise of future returns, and taxes, fees and risk are not included. This is an educational tool, not investment advice.