Finance & Money

Compound Interest

Calculate future value with compounding interest over time.

Project a starting balance and regular month-end contributions using a nominal annual rate compounded monthly. Compare scenarios; a constant return is an assumption, not a forecast.

Enter your numbers

Principal ($)

The initial lump sum you are investing.

Annual Rate (%)7%

Expected average annual return.

Years

Investment horizon in years.

Monthly Contribution ($)

Regular monthly addition to the investment.

Results update as you change the inputs. Calculations run in your browser.

Projected future value

$54713.58

total Contributions: $34000.00
interest Earned: $20713.58
growth Multiple: 1.61× contributions

See the formula

Formula and method

FV = P(1+i)^n + M[(1+i)^n − 1]/i; i = annual rate/12, n = years×12. At 0%, FV = P + M×n.

P is principal, r is annual rate, t is years, M is monthly contribution.

Uses the same monthly compounding rate for the starting balance and month-end contributions. Results are before taxes, fees and inflation. This models a steady rate rather than variable market returns.

Worked examples

Long-term RRSP growth

Principal ($):: 50000
Annual Rate (%):: 7
Years:: 25
Monthly Contribution ($):: 500

Projected future value: $691306.76

Emergency fund growth

Principal ($):: 10000
Annual Rate (%):: 4
Years:: 5
Monthly Contribution ($):: 0

Projected future value: $12209.97

Child's education savings

Principal ($):: 5000
Annual Rate (%):: 6
Years:: 18
Monthly Contribution ($):: 150

Projected future value: $72786.81

Assumptions and limits

Nominal annual rate compounded monthly
Contributions at the end of each month
Constant rate; no tax, fees, inflation or contribution-room check

This tool provides an educational estimate. Rules, rates and personal circumstances can change the answer. Review the assumptions before relying on a result. Report a correction.

Common mistakes to avoid

Confusing nominal rate with real (inflation-adjusted) rate — use real rate for purchasing power projections.
Forgetting to account for taxes on investment gains when held outside a TFSA or Roth IRA.
Using a single fixed return rate — actual markets fluctuate; this is a projection, not a guarantee.
Ignoring contribution room limits for registered accounts like RRSP or TFSA.

Frequently asked questions

What rate should I use?

Use a rate appropriate to the scenario you are comparing. A higher assumed rate produces a higher projection and is not a promised investment return.

Does this include inflation?

No. The result is nominal. Purchasing power depends on inflation over the same period.

Can I start with zero?

Yes. A zero starting balance can still grow through monthly contributions.