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Compound Interest Calculator
Compound interest means you earn interest on earlier interest as well as on your deposits. Enter a starting amount, a monthly contribution and a rate to see the balance year by year.
Result
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Show year-by-year growth
For information only. Results are estimates based on the numbers you enter and the formula shown below. They are not financial, tax, legal or investment advice and do not replace a qualified professional or the official figures from your lender, employer or provider.
How to use this calculator
- Enter what you have now and what you plan to add each month (use 0 for none).
- Enter the expected yearly rate. For savings accounts use the stated rate; for investments, a long-run assumption — returns are not guaranteed.
- Choose how often interest is compounded. Banks usually state this along with the APY.
- Open the year-by-year table to see contributions and interest separately.
The formula
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. For continuous compounding the growth factor is e^(r·t). The SEC's Investor.gov uses the same compound interest idea in its own calculator.
Worked example
$10,000 at 5% for 10 years
- Yearly compounding: 10,000 × 1.05^10 = 10,000 × 1.628895 = $16,288.95.
- Monthly compounding: 10,000 × (1 + 0.05/12)^120 = 10,000 × 1.647009 = $16,470.09.
- Contributions only: $100 a month at 6% compounded monthly for 10 years = 100 × ((1.005^120 − 1) ÷ 0.005) = $16,387.93, of which $12,000 is your deposits.
More frequent compounding helps, but the rate and the time you leave money invested matter far more.
The rule of 72
A quick mental check: divide 72 by the yearly rate to estimate how many years it takes money to double. At 6%, about 12 years (the exact answer with yearly compounding is 11.9). It is an approximation and gets less accurate at high rates.
Frequently asked questions
What is the difference between APR and APY?
APR is the stated yearly rate. APY (annual percentage yield) includes the effect of compounding, so it is higher whenever interest compounds more than once a year. The calculator shows this as the effective annual rate.
Does compounding frequency matter much?
A little. At 5%, going from yearly to monthly compounding raises the effective rate from 5.00% to about 5.12%. Rate and time matter much more.
Are contributions added at the start or end of the month?
At the end of each month. Deposits made at the start of the month would earn one extra month of interest each.
Can I use this for investments like index funds?
You can model a steady assumed return, but real investment returns vary from year to year and can be negative. Treat the result as a scenario, not a forecast.
Are taxes and inflation included?
No. Interest may be taxable, and inflation reduces what the future balance can buy.