Compound interest is the foundation of long-term investing. The earlier you start, the longer each dollar has to compound — and regular contributions dramatically accelerate the outcome compared to a lump sum alone.
The calculator above lets you model any combination of initial investment, regular additions, compounding frequency, and time horizon. The line chart shows both total portfolio value and the portion made up of earned interest, making the compounding effect visible.
Weekly vs monthly contributions
The difference between weekly ($500/week) and monthly ($2,000/month) contributions at the same annual total is minor — but both beat a single annual deposit because your money enters the compounding cycle sooner.
Worked example
- Initial investment: $20,000
- Monthly addition: $800
- Rate: 7% compounded monthly
- Time: 25 years
Result: roughly $780,000 total value, of which about $540,000 is interest earned on $240,000 of contributions. The 7% rate over 25 years more than triples the contribution amount in interest alone.
TFSA and RRSP context
Inside a TFSA or RRSP, all compounding is sheltered from annual tax. Every dollar of interest shown in the calculator stays in the account and continues to compound. In a taxable account, annual distributions reduce the effective compounding rate — use 0 for a registered account, and factor in your marginal rate for a taxable estimate.
Scope note: This tool models pre-tax compounding. It does not account for contribution room limits, withholding taxes on foreign income, or management expense ratios (MERs). For a taxable vs tax-deferred comparison, see the Return Goal Calculator.