# Compound interest calculator

> Compare how an initial amount may grow on its own and with regular contributions over time.

Canonical HTML: https://getclova.com/tools/compound-interest-calculator

The interactive calculator is available on the [canonical HTML page](https://getclova.com/tools/compound-interest-calculator). This representation explains the model, formulae and limitations without reproducing its controls.

## Base compound-interest formula

With no contributions or fees:

$$
A = P(1 + i)^t
$$

- $P$ is the starting balance.
- $i$ is the effective annual return as a decimal.
- $t$ is the number of years.
- $A$ is the ending balance.

For a nominal annual rate $r$ compounded $n$ times each year:

$$
A = P\left(1 + \frac{r}{n}\right)^{nt}
$$

## Regular contributions

If $C$ is added at the end of every period:

$$
A = P(1 + j)^N + C\frac{(1 + j)^N - 1}{j}
$$

Here, $j$ is the effective return for each contribution period and $N$ is the total number of periods. Contributions are tracked separately from investment growth.

## Assumptions and limitations

- Returns, inflation and fees remain constant for the illustration.
- Contributions are added at the end of each selected period.
- The calculator does not model tax, franking credits, account types, exchange rates or personal circumstances.
- Actual savings and investment returns change over time and may be negative.
- Results are general education, not personal financial advice or forecasts.

Read [How compound interest works](https://getclova.com/blog/how-compound-interest-works) for the sourced guide.