Compound Interest Calculator
Compound Interest Calculator
Calculate the future value of an investment with monthly compounding and regular contributions.
Compound interest is often called the most powerful force in personal finance — small, regular contributions can grow into a substantial sum given enough time, because you eventually earn returns on your previous returns, not just your original contributions. This calculator projects the future value of an investment or savings account with monthly compounding and regular contributions.
How This Calculator Works
The calculator compounds your starting balance monthly at your expected annual rate of return, and adds your specified monthly contribution at the end of each month, compounding those contributions forward as well. The result splits out your total contributions from your total investment growth, so you can see exactly how much of your final balance came from your own money versus compounding returns.
Frequently Asked Questions
How much difference does starting early actually make?
A significant one — because compounding is exponential, money invested early has more time to generate returns on its own returns. Starting even five or ten years earlier, at the same contribution amount and rate of return, can meaningfully increase your final balance thanks to that extra compounding time.
What's a realistic rate of return to assume?
It depends on your investment mix — conservative portfolios (mostly bonds/GICs) might assume 2–4%, a balanced portfolio might use 5–6%, and an equity-heavy portfolio might use 7–8%, though actual returns vary year to year and aren't guaranteed. Try a few different rates to see how sensitive your projection is.
Does this account for inflation?
No — this shows the nominal (non-inflation-adjusted) future value of your investment. To estimate the real, inflation-adjusted purchasing power of that future balance, you'd typically subtract an assumed inflation rate (historically around 2% in Canada) from your rate of return.
Should I use this for an RRSP or TFSA projection?
Yes — this calculator works for any account that compounds monthly, including RRSPs and TFSAs. For a Canada-specific view that also factors in your contribution room and tax refund, use the dedicated RRSP calculator or TFSA calculator on this site.