Enter the initial amount, the interest rate, the period and the monthly contribution to simulate the exponential growth of your investment with compound interest. Results appear in summary cards, charts, and a month-by-month table.
Compound Interest Simulator
Result
Monthly Table
| Month | Monthly Interest | Total Invested | Total Interest | Accumulated |
|---|
How to Use the Calculator
- Enter the Initial Amount (the capital you already have to invest).
- Set the Interest Rate and choose whether it is monthly or annual. The conversion to monthly rate is done automatically using exponential equivalence.
- Choose the Period in months or years.
- If you want to simulate periodic contributions, enter the Monthly Contribution.
- Click Calculate to see the summary, charts, and detailed monthly table.
What Is Compound Interest
In compound interest, at the end of each period the interest earned is added to the balance and starts earning interest in the next period. This creates exponential growth that is far more powerful over long time horizons than simple interest.
The formula for a lump sum (no contributions) is:
M = P × (1 + i)n
With regular monthly contributions C:
M = P × (1 + i)n + C × [(1 + i)n − 1] ÷ i
Where P is the initial capital, i is the monthly rate, n is the number of months, and C is the monthly contribution.
Converting Annual Rate to Monthly Rate
In compound interest, the conversion is exponential, not proportional:
imonthly = (1 + iannual)1/12 − 1
So 12% per year is equivalent to approximately 0.949% per month — different from the linear 1% of simple interest. This calculator performs the conversion automatically when you select "Annual".
Practical Examples
| Capital | Contribution | Rate | Period | Total Interest | Amount |
|---|---|---|---|---|---|
| $1,000 | $0 | 1% p.m. | 12 months | $126.83 | $1,126.83 |
| $5,000 | $200 | 12% p.a. | 2 years | $761.90 | $10,561.90 |
| $0 | $500 | 0.8% p.m. | 60 months | $7,298.82 | $37,298.82 |
Frequently Asked Questions
What is compound interest?
In compound interest, the interest from each period is added to the balance and earns interest in the following period. This generates exponential growth. The formula is M = P × (1 + i)t, where P is the capital, i is the rate per period, and t is the number of periods.
How do you convert an annual rate to a monthly rate in compound interest?
In compound interest, the conversion is exponential: i_monthly = (1 + i_annual)1/12 − 1. For example, 12% per year equals approximately 0.949% per month, not 1% as in simple interest.
What is the Rule of 72 in compound interest?
The Rule of 72 is a quick approximation: divide 72 by the interest rate per period to estimate how many periods it takes for the capital to double. At 1% per month, the capital doubles in approximately 72 ÷ 1 = 72 months (6 years).
What is the compound interest formula with monthly contributions?
With monthly contributions C, the amount after n periods is: M = P × (1+i)n + C × [(1+i)n − 1] ÷ i. This formula represents the future value of an annuity combined with the growth of the initial capital.
Why does compound interest grow so much more than simple interest?
Because the interest is reinvested: each month, the accumulated interest becomes part of the calculation base. In short periods the difference is small, but over decades the exponential effect can multiply wealth several times more than simple interest.
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