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Finance

Compound Interest Calculator

See how savings grow with compound interest, starting from an initial deposit plus optional monthly or yearly contributions.

Free ยท no sign-up Runs in your browser
Deposits
Contributions are added at the end of each month or year.
Interest

How to use the compound interest calculator

Enter an initial deposit, an optional regular contribution and how often you add it (monthly or yearly). Then enter the annual interest rate, choose how often interest is compounded and set the number of years. Press Calculate to see the final balance, the total amount you put in and the interest earned, followed by a table showing the balance at the end of each year.

You can leave the initial deposit empty to model regular saving only, or leave the contribution empty to see how a single lump sum grows.

The compound interest formula

For a single deposit, the balance after t years is:

A = P × (1 + r / n)^(n × t)

  • P is the initial deposit
  • r is the annual interest rate as a decimal
  • n is the number of times interest is compounded per year
  • t is the number of years

Worked example

A deposit of 10,000 at 5% compounded annually for 10 years grows to 10,000 × 1.05^10 = 16,288.95, so it earns 6,288.95 in interest.

Regular contributions also earn interest. Saving 100 at the end of every month at 6% compounded monthly for 10 years gives 100 × ((1.005^120 − 1) / 0.005) = 16,387.93. You put in 12,000, and the remaining 4,387.93 is interest.

Assumptions

  • Contributions are added at the end of each month or year. Money deposited at the start of a period would earn slightly more.
  • When contributions and compounding happen at different frequencies, the calculator converts the annual rate into the equivalent rate for each contribution period, so the effective yearly growth matches the compounding you chose.
  • The interest rate stays the same for the whole period, and taxes, fees and inflation are not taken into account. Treat the results as estimates.

Good to know

  • More frequent compounding earns a little more. At 5%, annual compounding yields 5.00% a year while daily compounding yields about 5.13%.
  • Time matters more than anything else: interest earned in early years keeps earning interest in later years.
  • The rule of 72 gives a quick check. Divide 72 by the interest rate to estimate how many years it takes money to double; at 6% that is roughly 12 years.

Frequently asked questions

What is compound interest?

Compound interest is interest earned on both your original money and on the interest it has already earned. Over time this makes savings grow faster than simple interest, which is paid only on the original amount.

Are contributions made at the start or end of each period?

This calculator assumes contributions are made at the end of each month or year, which is the common convention for regular savings plans. Deposits made at the start of each period would end up slightly higher.

How much difference does compounding frequency make?

Some, but less than people expect. At 5% a year, 10,000 grows to 16,288.95 in 10 years with annual compounding and to about 16,486.65 with daily compounding. The rate and the time period matter far more.

Does the calculator include taxes or inflation?

No. It shows nominal growth before taxes, fees and inflation. To get a rough picture of real growth, you can enter an interest rate reduced by the expected inflation rate.