Our calculator provides highly accurate results based on the information you provide. It uses standard financial formulas to compute compound interest, taking into account initial investment, regular contributions, interest rate, compounding frequency, and time period. However, it's important to remember that actual investment returns may vary due to market fluctuations and other factors.

Simple interest is calculated only on the initial amount (principal) that you invest. For example, if you invest $1,000 at 5% simple interest for 10 years, you'll earn $50 each year, totaling $500 over the decade. Compound interest, on the other hand, is interest calculated on the initial principal and also on the accumulated interest of previous periods. Using the same example with compound interest, your investment would grow to approximately $1,628.89 after 10 years.

The more frequently you contribute, the greater the impact of compounding. Monthly contributions are a popular choice because they align with most people's income schedules. However, the key is consistency. Regular contributions, no matter how small, can significantly boost your investment growth over time due to the power of compounding. The calculator allows you to input monthly contributions to see how they affect your overall returns.

Yes, our calculator allows you to choose between different compounding frequencies: monthly, quarterly, semi-annually, and annually. The more frequently interest is compounded, the faster your investment will grow. For example, interest compounded monthly will grow faster than interest compounded annually, assuming the same interest rate and principal amount. This is because with monthly compounding, interest is calculated and added to the principal 12 times a year, versus just once a year with annual compounding.

Inflation reduces the purchasing power of money over time. When calculating your investment returns, it's important to consider the effects of inflation. Our calculator includes an inflation rate input to help you estimate the real value of your investment in the future. For example, if your investment grows at 7% annually but inflation is 2.5%, your real rate of return is approximately 4.5%. This means your money is growing in nominal terms but the actual goods and services you can buy with it are increasing at a slower rate.