Compound Interest Calculator

How to use the Compound Interest Calculator

1. Enter your initial deposit, the yearly interest rate and how often interest compounds.
2. Set the time period in years.
3. Optionally add a regular contribution, choose monthly or yearly, and whether you pay in at the start or end of each period.
4. Read the future value, total deposits and interest, then check the yearly table or download it as CSV.

Features

• Daily, weekly, monthly, quarterly, semi-annual, annual or continuous compounding
• Monthly or yearly contributions at the start or end of each period
• Effective yearly rate (APY) and exact time to double
• Stacked yearly chart of deposits versus interest
• Year-by-year table with CSV download
• Works with any currency, or none

How compound interest works

With compound interest you earn interest on your original money and on the interest it has already earned. Each time interest is added to the balance, the next round is calculated on a slightly bigger number. Over a year or two the effect is small; over decades it does most of the work.

The formulas

For a single deposit: A = P × (1 + r/n)^n×t, where P is the starting amount, r the yearly rate as a decimal, n the number of compounding periods per year and t the number of years. With continuous compounding the formula becomes A = P × e^r×t.

Regular deposits add a growing series. For deposits of D at the end of each period, their future value is D × ((1 + i)^k − 1) ÷ i, where i is the rate per deposit period and k the number of deposits. Deposits at the start of each period earn one extra period of interest, so the result is multiplied by (1 + i). When deposits and compounding happen at different frequencies, the calculator converts the rate into the equivalent rate for each deposit period, the usual method in banking and finance textbooks.

Worked example

Invest 10,000 at 5% compounded monthly for 10 years and add 100 at the end of every month. The deposit grows to 16,470.09 and the monthly additions to 15,528.23, a total of 31,998.32. You put in 22,000, so 9,998.32 is interest.

Does compounding frequency matter?

More frequent compounding helps, but less than many people expect. Here is 10,000 at 6% for 10 years:

Moving from annual to monthly compounding is worth about 285 here, while going from daily to continuous adds less than one. The rate and the number of years matter far more than the compounding schedule.

APY and the rule of 72

Banks often advertise the annual percentage yield (APY), the rate you effectively earn in a year after compounding: (1 + r/n)ⁿ − 1. Use APY to compare accounts that compound differently. For a quick mental check, the rule of 72 says money doubles in roughly 72 ÷ rate years: about 12 years at 6% and about 9 years at 8%. The calculator shows the exact doubling time next to the APY.

Tips and common mistakes

• Enter the yearly rate, not the monthly one. A rate of 0.5% a month is 6% a year.
• Start early. Ten extra years of compounding usually beats a larger deposit made later.
• Allow for inflation and tax. A 5% return with 3% inflation grows your real purchasing power by only about 2% a year. The Inflation Calculator shows what a future sum is worth today.
• Investment returns are not fixed. For stock or fund investing, test a range of rates or use the SIP Calculator.

Results are estimates for information only and are not financial advice; real returns depend on the account or investment, fees and taxes.

Frequently asked questions