About the Compound Interest Calculator
This calculator projects how an investment grows over time from an initial amount plus optional monthly contributions, compounded monthly at a constant annual rate. It reports the future value in two ways: the raw nominal number your account would show, and that same amount adjusted for inflation to show what it would actually be worth in today's purchasing power — a step many simple compound interest calculators skip, even though inflation meaningfully erodes long-run returns. It also breaks results down year by year, and separates how much of the final balance came from your own contributions versus investment growth. Everything is calculated locally in your browser.
How This Works
CompoundingInterest is compounded monthly — each month's interest is calculated on the balance including all previous interest, not just the original principal.
Monthly contributionsEach contribution is assumed to happen at the end of the month, and starts earning interest from the following month — the standard "ordinary annuity" convention used by most retirement calculators.
Nominal vs real value"Nominal" is the raw dollar (or euro/pound) figure your account balance would show. "Today's purchasing power" divides that by cumulative inflation, showing what it could actually buy compared to today — this is usually the more meaningful number for long-term planning.
Why inflation mattersEven a modest 2-3% annual inflation rate compounds significantly over 20-30 years — a nominal amount that looks large can represent meaningfully less real purchasing power by the time you'd actually use it.
What this doesn't includeTaxes on investment gains, account or fund fees, contribution limits on tax-advantaged accounts (like a 401(k) or ISA), and the reality that real returns vary year to year rather than staying constant.
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