Interest Calculator

Simple interest is earned only on your original balance, while compound interest is earned on both the original balance and any interest already added to it — so the more frequently interest compounds, the faster a balance grows. This calculator projects how an initial investment plus regular contributions grows under compound interest, after accounting for tax and inflation.

Here's the difference in practice. Say you put $100 in an account paying 10% interest for two years. With simple interest, you earn $10 in year one and $10 again in year two — a flat $20 total, because interest is only ever calculated on the original $100. With compound interest, year one still earns $10, taking your balance to $110. But year two's interest is calculated on that new $110, not the original $100 — so you earn $11 instead of $10, ending with $121. That extra $1 is "interest on interest," and it's the whole reason compounding matters: the effect is small over two years but grows dramatically over decades, especially with regular contributions added on top. How often interest compounds also matters. Compounding monthly instead of annually at the same nominal rate earns slightly more, because each month's interest starts earning its own interest sooner. Compounding daily earns more still, and continuous compounding — interest calculated at every possible instant — is the mathematical ceiling on how much a given rate can earn. The chart below shows exactly how much difference this makes for the numbers you entered.