Results
Future Value: –
Total Contributions: –
Total Interest Earned: –
Overview
This calculator lets you forecast the future value of your savings or investment using the power of compound interest. It supports flexible compounding intervals and optional monthly or annual contributions.
It’s ideal for personal finance planning, helping you understand how savings grow over time when invested at a fixed interest rate.
Formula & Methodology
The core formula is:
\( A = P \left(1 + \frac{r}{n} \right)^{nt} + \frac{PMT \left( \left(1 + \frac{r}{n} \right)^{nt} - 1 \right)}{r/n} \)
- \( A \) = future value
- \( P \) = initial principal
- \( r \) = annual interest rate (decimal)
- \( n \) = compounds per year
- \( t \) = number of years
- \( PMT \) = periodic contribution
Examples
- \$5,000 at 5% compounded monthly over 10 years with \$100 monthly → Final Value: ~\$20,789
- €2,000 at 3% compounded quarterly for 5 years, no contributions → Final Value: ~€2,319.61
- £10,000 at 7% compounded annually for 20 years with £500 yearly → Final Value: ~£48,996.56
Use Cases
- Estimate retirement savings growth
- Compare interest-bearing savings accounts
- Plan for children’s education funds
FAQ
How is compound interest different from simple interest?
Compound interest earns interest on both your original investment and previously earned interest. Simple interest earns only on the original amount.
Can I simulate bi-weekly contributions?
This tool currently supports monthly and annual contributions. Bi-weekly support may be added in a future version.
What compounding frequency is best?
Monthly or daily compounding yields more over time compared to yearly or quarterly, assuming the same interest rate.