Compound Interest Calculator
See how your savings or investments grow with compound interest and monthly contributions, in Canadian dollars (CAD). Includes a year-by-year projection.
Your Investment
Growth Projection
Future Value
$58,261
after 10 years at 6% annual return
💬 In Simple Words
You put in $5,000 today and added $300 every month after that. After 10 years you'll have $58,261 — of that, you only contributed $41,000 out of pocket. The other $17,261 is the return that money generated on its own.
| Year | Contributed | Return | Balance |
|---|---|---|---|
| 1 | $8,600 | $409 | $9,009 |
| 2 | $12,200 | $1,065 | $13,265 |
| 3 | $15,800 | $1,984 | $17,784 |
| 4 | $19,400 | $3,182 | $22,582 |
| 5 | $23,000 | $4,675 | $27,675 |
| 6 | $26,600 | $6,483 | $33,083 |
| 7 | $30,200 | $8,624 | $38,824 |
| 8 | $33,800 | $11,119 | $44,919 |
| 9 | $37,400 | $13,990 | $51,390 |
| 10 | $41,000 | $17,261 | $58,261 |
Projections are estimates based on a fixed return rate. Actual returns vary depending on the instrument and market conditions. This does not constitute financial advice.
The Compound Interest Formula
👋 Simple Explanation
Compound interest is interest that earns interest: the return you generate starts generating its own return, and the total grows faster and faster over time.
Compound interest is calculated with this formula:
A = P × (1 + r/n)^(n×t)
Where A = final amount, P = initial principal, r = annual interest rate (decimal), n = number of times it compounds per year, and t = time in years.
Where to Hold Investments That Compound in Canada
A TFSA (Tax-Free Savings Account) lets this growth compound completely tax-free — no tax on the gains, ever, even when you withdraw. An RRSP (Registered Retirement Savings Plan) defers tax until withdrawal instead. Both have annual contribution limits set by the CRA — see the retirement savings guide on this site for how the two compare.
Frequently Asked Questions
- What is compound interest?
- Compound interest is interest calculated on both your initial principal and the interest that has already accumulated from previous periods. Unlike simple interest (which only applies to the principal), compound interest grows exponentially over time.
- Can I use this to project my TFSA or RRSP growth?
- Yes — enter your current balance and expected annual return to see how it could grow. Just remember this calculator doesn't account for your annual contribution room limits, which are set by the CRA and matter a lot for TFSA and RRSP planning specifically.
- How do monthly contributions affect compound interest?
- Regular contributions significantly accelerate capital accumulation thanks to the compounding effect. Adding a fixed amount every month, on top of an initial deposit, can multiply your final result several times over compared to not contributing anything further.