Compound Interest Calculator – Future Investment & Wealth Projection
Simulate the exponential growth of your investments. Calculate total maturity corpus, interest earned, and wealth accumulation with regular monthly contributions and compound frequencies.
How Compound Interest Generates Long-Term Wealth
Albert Einstein famously remarked, “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”
Unlike simple interest, which only calculates returns on the initial principal, compound interest pays interest on both your initial principal AND on the accumulated interest from prior periods. When you pair this with regular monthly systematic investments, exponential compounding creates hockey-stick portfolio growth over 5, 10, 15, and 20 years.
Compound Interest Formula
The standard compounding equation with recurring deposits is:
A = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) - 1) / (r/n)]
- A: Future Value of the Investment
- P: Initial Principal Deposit
- PMT: Recurring Monthly Contribution
- r: Nominal Annual Interest Rate (as a decimal)
- n: Compounding frequency per year (12 for monthly, 365 for daily)
- t: Total investment horizon in years