Compound Interest Calculator Canada
Compound interest is the reason starting early beats starting big. This calculator shows what a lump sum plus regular monthly deposits becomes over time, and exactly how much of the final amount is interest earned on interest.
Monthly compounding with end-of-month deposits and a steady rate. Savings accounts compound on their own schedule and market returns are never steady, so use this as a planning illustration.
How it works
Simple interest pays only on your original money. Compound interest pays on your money plus all the interest it has already earned, which is why the growth curve bends upward over time. Doubling your time horizon usually adds far more than doubling your deposit.
A quick check on any result here is the Rule of 72: divide 72 by your rate to estimate the years money takes to double. At 7%, money doubles roughly every 10.3 years, which matches the worked example below, where $34,000 of deposits becomes $54,713.58.
Worked example
The calculator’s own output for $10,000 plus $200 a month for 10 years at 7%:
| Item | Amount |
|---|---|
| Starting amount | $10,000.00 |
| Monthly deposit | $200.00 for 10 years |
| Rate | 7% a year, compounded monthly |
| Total deposits | $34,000.00 |
| Compound interest earned | $20,713.58 |
| Final balance | $54,713.58 |
Frequently asked questions
What is the compound interest formula?
Future value equals principal times (1 + rate) to the power of periods, plus each deposit compounded for the time it stays invested. This calculator applies that monthly: balance times (1 + annual rate / 12) each month, plus your deposit.
How often should interest compound?
More frequent compounding gives a slightly higher result. Monthly compounding at 7% produces an effective annual rate of about 7.23%. Canadian mortgages are a special case: they compound semi-annually by law.
What rate should I use for investments?
For a savings account, use its actual rate. For a portfolio, test several rates, such as 4%, 6% and 8%, and plan around the cautious end rather than the best case.
Does inflation change the answer?
Yes. A balance growing at 7% while prices rise 2% grows in purchasing power at roughly 5% a year. The calculator shows nominal dollars; your future spending power is lower.
Why does starting 10 years earlier matter so much?
Because the last doubling is the biggest one. Money invested for 30 years at 7% doubles about three times; money invested for 20 years doubles only twice, so the early starter ends far ahead on the same deposits.
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For education only. This calculator gives estimates, not financial, tax or legal advice. Figures use 2026 rates where a rate is built in; confirm your own numbers before making a decision.
