How to use compound interest calculator
This is the amount that you have in hand today to invest.
Regular monthly deposit:
This is the amount that you plan to contribute to your investment each month. For example, $100 per month, $500 per month or $1,000 per month etc. Our compound interest calculator assumes that you invest this amount at the end of each month.
Number of years:
Enter in this field the number of years for which you want to calculate the total interest earned and the total future value of your invested money. For example, 5 years, 7 years, 10 years or 12 years etc.
Annual interest rate:
Enter in this field the annual interest rate (also known as nominal interest rate) offered by the bank or other financial institution. Please keep in mind that you must enter the annual interest rate not, the monthly, quarterly or semi-annually interest rate.
Compounding frequency is the number of times the interest is compounded in a year. For example, interest may be compounded annually, semi-annually, quarterly, monthly or daily etc.
Outputs to be generated
The compound interest calculator uses the above information and generates the following three out puts for you:
Total amount or future value:
Total amount is the future value of all of your invested money. It includes your initial investment, your monthly contributions and the amount of interest earned their on. In other words, it is the balance that you will have after the number of years for which you plan to continue your investment.
The amount of total interest that you will earn at the end of investment period. It is largely impacted by the interest rate, compounding frequency and life of your investment. The more frequent the interest is compounded, the higher is the amount of total interest.
It is the total of your initial investment and your monthly contributions and does not include interest. In other words, it is the total outflow of cash that will occur during the life of your investment.