Compound interest: how reinvesting gains changes everything
A compound interest calculator shows how an investment can grow when your gains are reinvested instead of withdrawn. With compounding, each period’s interest is added to the capital, and future interest is then calculated on a larger base. This creates an accelerating effect over time, especially for long durations and higher rates.
This tool uses a simple and standard model: you enter an initial investment, a percentage rate per period, and a number of periods. The result is computed locally in your browser and displayed instantly, along with a detailed table showing how the balance evolves at each step.
Common use cases include simulating long-term investing, estimating growth of a portfolio, comparing different rates, or understanding how much time can matter even when the rate looks small. Because everything runs 100% locally, no personal or financial data is sent anywhere.
Important: this calculator assumes a constant rate and full reinvestment of gains. Real investments can vary due to fees, taxes, volatility, or changing returns. Use this as an educational estimate.
What is this compound calculator used for?
This tool estimates the final value of an investment when gains are reinvested each period. It answers: “If I start with X, earn Y% per period, and reinvest, how much do I have after N periods?”
Who is this tool useful for?
- Investors comparing strategies with reinvestment
- Students learning how compounding works
- Anyone wanting a quick projection for saving or investing goals
Concrete examples
- Simulating an investment that returns 7% per year over 20 years
- Comparing 5% vs 8% over the same time horizon
- Understanding how reinvesting gains changes the curve
Common mistakes to avoid
- ❌ Confusing “rate per period” with annual rate (choose consistent periods)
- ❌ Entering negative values
- ❌ Expecting real markets to behave like a fixed-rate model
Limits and possible alternatives
This calculator uses a constant rate and does not include deposits, withdrawals, fees, or taxes. For more advanced simulations, you may need a model with contributions, variable returns, and costs.
Educational summary
Compounding means “earning returns on your returns”. Over time, reinvestment can have a strong effect, and this tool makes that effect visible instantly with a period-by-period table.