Compound interest

How it works

Each period the balance is multiplied by (1 + annual rate / compounds per year). Optional contributions land at the start or end of the period, then the loop repeats for years x compounds.

The rate is a constant you typed. It is not a forecast, a yield curve, or a Monte Carlo. Sequence of returns can wreck a path that looks fine at a flat 7%.

Worked example

10,000 principal, 7% annual, 10 years, 200 contributed at the end of each month, monthly compounding: you are stacking 120 adds on a geometric path. Ending value is sensitive to whether adds sit at the start or end of the month; start-of-period adds compound slightly more.

Limits

No taxes, inflation, fees, or withdrawals. Negative rates are allowed mathematically; they are not a product recommendation. Real accounts do not compound on a metronome.