🛠️ New Tool

Compound Interest Calculator

A compound interest calculator shows you how your money grows when you earn interest not just on what you deposit, but on the interest you've already earned. This is the single biggest driver of long-term wealth — Albert Einstein allegedly called it the "eighth wonder of the world." Use this free compound interest calculator to model your savings, retirement, or investment growth over 1, 5, 10, 20, or 30+ years.

Enter your starting balance, monthly contribution, expected interest rate, and time horizon. We'll show year-by-year growth, total contributions vs interest earned, and the real value after 2026 inflation (~3.2% Bank of Canada target). All math runs in your browser — your numbers never leave your device.

📊 Enter Your Numbers

Starting Balance (CAD)

Monthly Contribution (CAD)

Annual Interest Rate (%)

S&P 500 historical: ~10% • Bonds: ~4% • Savings: ~3%

Time Period (years)

Compounding Frequency

Inflation Rate (%, for "real" view)

BoC 2026 target: 2% • Realized 2024-25: ~3.2%

💰 Your Compound Growth

Future Value (Nominal)

What the account will show

Real Value (Today's Dollars)

After % inflation

Total Contributions

Interest Earned

Money Multiplier

0×

Your money grew this much

% from Compound Growth

Of the final balance

📈 Year-by-Year Growth

Year	Contributions	Interest	Balance	Real Value

Showing every year up to . Real value adjusts each year's balance for inflation.

📌 5 Tips to Maximize Compound Growth

✓ Start now, not later. Time in the market beats timing the market. $500/mo for 20 years at 7% is $260K; waiting 5 years costs you $130K.
✓ Compounding frequency matters. Daily compounding earns ~0.5% more per year than annual. Worth it for long horizons.
✓ Max tax-advantaged accounts first. TFSA and RRSP gains compound tax-free — 30-50% more wealth at the end.
✓ Don't withdraw early. Each withdrawal resets the compounding clock. Treat retirement savings as untouchable until 65.
✓ Reinvest everything. Dividends, interest, capital gains — reinvest them all. The whole magic of compounding is "interest on interest."

Disclaimer: This calculator provides estimates for educational purposes only. Not financial, tax, or legal advice.

Frequently Asked Questions

What is compound interest?

Compound interest is interest calculated on the initial principal and the accumulated interest from previous periods. So you earn 'interest on interest' — which makes your money grow exponentially over time, not linearly.

How do I calculate compound interest myself?

Use the formula A = P(1 + r/n)^(nt) where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the number of years. Or just use this free calculator.

How often does compound interest compound?

Daily, monthly, quarterly, or annually — depending on the account. Savings accounts typically compound daily or monthly. Mortgages compound semi-annually in Canada. The more frequent the compounding, the more you earn.

What's the difference between simple and compound interest?

Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus accumulated interest. Over 10+ years, compound interest can be 2-3x larger than simple interest at the same rate.

Is compound interest good or bad?

It depends — when you're earning it (savings, investments), compound interest is great. When you're paying it (credit cards, some loans), compound interest works against you. The direction matters more than the rate.