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Compound Interest Calculator

Deposits Go In

Future Value: $31,998.39
Total Deposits: $22,000.00
Interest Earned: $9,998.39
Effective yearly rate (APY)5.116%
$0$10k$20k$30k$40kYear 0Year 5Year 10

5% compounded monthly. Deposits go in at the end of each month, and interest is credited each month, to the cent, at the rate that matches your compounding over a year.

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Estimates for informational purposes only — not financial advice.

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Pin the numbers on screen, change any input, and see them side by side.

How Compound Interest Works

Compound interest is interest earned on interest. Each time interest is added to your balance, the next round is worked out on the larger amount, so growth speeds up the longer the money stays put. This calculator shows how a starting amount, regular deposits, the rate and how often it compounds work together, year by year.

How this calculator works

Grows a starting amount and regular deposits at a quoted interest rate and compounding, and shows the balance, deposits and interest year by year.

How it calculates

  1. Turns the quoted rate into an effective yearly rate: (1 + r/m)^m − 1, where m is 365 for daily, 12 for monthly, 4 for quarterly and 1 for yearly compounding. A rate entered as an APY is used as it is.
  2. Turns that yearly rate into the rate for each deposit period: (1 + yearly rate)^(1/n) − 1, where n is 52, 26, 12 or 1 deposits a year. When deposits and compounding share a schedule, that is exactly r/m.
  3. Each period, adds the deposit at the start or the end, as chosen, and credits that period's interest, rounded to the cent.
  4. Adds up each year's deposits and interest for the yearly table; the balance shown is the last year's ending balance.

What it assumes

  • The rate stays the same for the whole period.
  • When deposits and compounding run on different schedules, each deposit earns the equivalent rate for the time it is invested.
  • Interest is credited each deposit period, to the cent.
  • No taxes, fees or withdrawals.

Sources

Copy and figures last reviewed .

How we build and check all our calculators

Frequently Asked Questions

What is the difference between simple and compound interest?

Simple interest is paid only on the amount you put in; compound interest is also paid on the interest already earned. At 5% a year for 10 years, $10,000 earns $5,000 of simple interest but $6,288.95 compounded yearly, because each year's interest is added to the balance and earns interest itself. The longer the time, the wider the gap.

How much difference does compounding frequency make?

A little, and more at higher rates. A 5% rate compounded yearly earns exactly 5% in a year; compounded quarterly it earns about 5.09%, monthly about 5.12% and daily about 5.13%. The calculator shows this effective yearly rate (the APY) with the results, so you can compare offers quoted with different compounding.

My bank quotes an APY. Which compounding should I choose?

Choose "Rate is an APY". An annual percentage yield already includes compounding: it is what the balance earns over a year. Choosing monthly or daily compounding as well would count the compounding twice and overstate your growth. US banks quote savings and CD rates as an APY, using a formula set by federal Truth in Savings rules.

Does it matter whether I deposit at the start or end of each period?

Yes, by one period of interest on each deposit. A deposit at the start of a month earns that month's interest; one at the end begins earning the next month. Textbook formulas usually assume the end of each period, which is this calculator's default. Switch to the start to match, for example, an automatic transfer on the first of each month.

What is the rule of 72?

It is a quick way to estimate how long money takes to double: divide 72 by the yearly rate. At 6% that is about 12 years, and at 8% about 9 years. It is an approximation that works best for rates between a few percent and about 10%; this calculator gives the exact figure for your rate, compounding and deposits.

Term Definitions

Initial Investment

The lump sum you deposit or invest at the start. It compounds for the whole period, so even a modest starting amount can grow a lot over a long time. Enter 0 if you are starting from nothing and only making regular deposits.

Interest Rate

Enter the rate as it is quoted, then choose how often it compounds. A savings account or CD rate quoted as an APY already includes compounding: choose "Rate is an APY". A rate quoted with a compounding schedule, such as 5% compounded monthly, earns a little more than 5% over a year, and the results show that effective yearly rate.

Compounding

Compounding is how often earned interest is added to your balance, after which it earns interest too. The more often a rate compounds, the more it earns: 5% compounded daily works out to about 5.13% over a year, monthly to about 5.12%, and yearly to exactly 5%. US banks state that yearly figure as the annual percentage yield (APY), worked out with a formula set by federal Truth in Savings rules.

Regular Deposit

A regular deposit is money you add on a schedule: every week, every two weeks, every month or once a year. Each deposit earns interest from the day it goes in, and that interest earns interest too, so steady deposits grow to more than their sum.

How Often

Choose weekly, every two weeks, monthly or yearly to match how you save, for example every payday. Interest is credited on the same schedule, at the rate that adds up to your APY over a year, so the schedule changes the result only through when your money goes in.

Deposit Timing

A deposit made at the start of a period earns that period's interest; one made at the end starts earning in the next. The difference is one period of interest on each deposit: small, but it adds up over many years. Textbook formulas usually assume the end of each period; the Savings calculator uses the start.

Years

This is the total number of years you plan to let your savings or investment grow. The longer the time horizon, the more significant the effect of compound interest will be on your final amount.

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