Compound Interest Calculator
Enter the starting amount, the time, the yearly rate and how often interest compounds. Regular deposits are optional.
Updated
Compound Interest Calculator
Our Compound Interest Calculator shows how a sum of money grows when interest is added to the balance and then earns interest itself. Enter the starting amount, the years and months, the yearly rate and how often it compounds, and the final amount appears at once with the total interest, the effective annual rate and a principal and interest split. Add an optional regular deposit, choose when it is paid and let it grow each year, then open the month-by-month schedule or download it as a CSV file.
Quick answer
Compound interest uses A = P(1 + r/n)^(nt): 10,000 × (1 + 0.06/12)^120 ≈ 18,193.97, so the interest is about 8,193.97.
- P: the starting amount (principal).
- r and n: the yearly rate as a decimal and the compoundings per year.
- t: the time in years. 10 years monthly is nt = 120.
- Deposits: each one grows from the day it is added.
What Is Compound Interest?
Compound interest is interest calculated on the starting amount and on the interest already added to it. Each time interest compounds, the balance gets bigger, so the next round of interest is bigger too. Over long periods this "interest on interest" makes savings grow faster and faster.
Interest = A − P
- A: the final amount.
- P: the initial amount, or principal.
- r: the annual interest rate as a decimal (6% is 0.06).
- n: how many times a year interest compounds (12 for monthly).
- t: the time in years.
How to Calculate Compound Interest
Put 10,000 in a savings account paying 6% a year, compounded monthly, for 10 years:
nt = 12 × 10 = 120
1.005^120 ≈ 1.819397
A ≈ 10,000 × 1.819397
≈ 18,193.97
- Find the rate per period. 6% ÷ 12 = 0.5% a month, or 0.005.
- Count the periods. 12 a year for 10 years is 120.
- Grow the principal. 10,000 × 1.005^120 ≈ 18,193.97.
- Subtract the principal. The compound interest is about 8,193.97.
Simple interest at the same rate would pay 600 a year, or 6,000 over 10 years, for a total of 16,000. Compounding adds about 2,194 more.
How Compounding Frequency Changes the Result
The more often interest compounds, the sooner each slice of interest starts earning its own interest. Here is 10,000 at 6% for 10 years:
| Compounding | Final amount |
|---|---|
| Yearly | 17,908.48 |
| Quarterly | 18,140.18 |
| Monthly | 18,193.97 |
| Daily | 18,220.29 |
The gain from more frequent compounding gets smaller each step: going from yearly to monthly adds about 285, but monthly to daily adds only about 26. The "Effective annual rate" row shows the true yearly rate for your choice: 6% compounded monthly is about 6.1678% a year.
Compound Interest With Regular Deposits
Adding money regularly usually matters more than the rate. Start with 10,000, add 200 at the end of every month and earn 7% compounded monthly for 20 years:
- Final amount: about 144,572.72.
- You put in: 10,000 + 48,000 of deposits = 58,000.
- Interest earned: about 86,572.72, more than everything you deposited.
Timing: a deposit at the start of each month earns one extra month of interest, so the same plan reaches about 145,180.47. Growing deposits: raising the 200 by 3% each year (the "Deposit growth" field) brings the total to about 171,236.17, from 64,488.90 of deposits.
Compound Interest Examples
| Plan | Final amount |
|---|---|
| 10,000 at 8% yearly, 10 years | 21,589.25 |
| 50,000 at 6% monthly, 20 years | 165,510.22 |
| 5,000 at 10% yearly, +200 a month (start), 15 years | 101,210.48 |
In the last plan the deposits total 36,000, so 41,000 goes in and about 60,210.48 of it is interest. With yearly compounding and monthly deposits, the calculator converts the yearly rate to the equivalent monthly rate so every deposit earns interest from the month it is made.
Limitations and Common Mistakes
- The rate is fixed. Real savings rates and market returns change. Treat the result as a projection.
- Tax and fees. Interest is often taxed and accounts may charge fees. Use an after-cost rate for a net figure.
- Inflation. The final amount is in future money. Subtract inflation from the rate to see real growth.
- APR vs APY. Enter the nominal yearly rate and pick its compounding. An APY is already the effective yearly rate, so enter it with yearly compounding.
- Whole months. The calculator works month by month, so tenures are whole years and months.
Key Terms
- Principal
- The starting amount plus deposits.
- Compounding
- Adding interest to the balance.
- Frequency (n)
- Compoundings per year.
- Effective rate
- True yearly growth, or APY.
- Future value
- The balance at the end.
How to Use the Compound Interest Calculator
- Enter the amount and the time. Type the initial amount, such as 10,000, and the tenure in years and months, such as 10 years.
- Enter the rate and the compounding. Type the annual interest rate, such as 6, and choose how often it compounds, such as monthly.
- Add deposits if you make them. Optionally type a regular deposit, choose how often and when it is paid, and how much it grows each year.
- Read, copy or download. The final amount appears as you type, with the working, the principal, the interest, the effective annual rate and a split bar. Press Show schedule for the month-by-month table or Download CSV to save it. Press Clear or Esc to start again.
Example: 10,000 for 10 years at 8% compounded yearly with no deposits. The final amount is 21,589.25, of which 11,589.25 is interest.
Who Can Use This Calculator?
Frequently Asked Questions (FAQs)
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the principal, r the yearly rate as a decimal, n the compoundings per year and t the years. The compound interest is A − P.
How much is 10,000 at 6% compounded monthly for 10 years?
About 18,193.97. 10,000 × (1 + 0.06/12)^120 ≈ 18,193.97, so the interest is about 8,193.97.
Does compounding more often make a big difference?
Less than most people expect. 10,000 at 6% for 10 years grows to 17,908.48 compounded yearly, 18,193.97 monthly and 18,220.29 daily.
How do monthly deposits change compound interest?
Each deposit earns compound interest from the month it is added. 10,000 plus 200 a month at 7% for 20 years grows to about 144,572.72, of which about 86,572.72 is interest.
What is the difference between deposits at the start and end of the period?
A deposit at the start of a period earns interest for that period, so the final amount is a little higher than with deposits at the end.
What is the effective annual rate?
The yearly growth rate after compounding. 6% compounded monthly is (1 + 0.06/12)^12 − 1 ≈ 6.1678% a year.
Can I download the schedule?
Yes. After a result appears, press Show schedule to see each month, or Download CSV to save the month, opening balance, deposit, interest and ending balance.
Is the Compound Interest Calculator free?
Yes. It is completely free, needs no sign-up, and can be used as many times as you like.
Sources
- Wikipedia. Compound interest.
- Investor.gov (SEC). Compound Interest Calculator.
- Corporate Finance Institute. Compound Interest.
- OpenStax. Contemporary Mathematics, 6.4 Compound Interest.
- Wikipedia. Future value.
- Wikipedia. Annuity.
Use our Compound Interest Calculator to see how your savings and deposits grow in seconds.