Compound Interest Calculator
Calculate how your investments grow with daily, monthly, or yearly compounding. Now supports regular withdrawals for retirement planning.
How Compound Interest Work
Compound interest is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. It's "interest on interest."
Daily vs Monthly Compounding
The frequency of compounding matters. Daily compounding (365 times a year) generates more interest than monthly compounding (12 times a year) because interest is added to your account more often, allowing it to start earning its own interest sooner.
Withdrawals Strategy
This calculator also supports withdrawals. This is useful for planning retirement, where you start with a lump sum (e.g., $500,000) and withdraw a set amount monthly to live on, while the remaining balance continues to grow with interest.
Formula Used
We calculate the future value by iterating through each period, applying the periodic interest rate to the current balance, and adding/subtracting the monthly contribution.