Compound Interest Calculator

See how money grows when interest earns interest. The compound interest calculator handles yearly to continuous compounding, optional monthly deposits, and charts every year.

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Optional, added at the end of each month

Future value
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Estimate only. Not financial advice.

How to use the Compound Interest Calculator

  1. Enter the Starting amount, yearly Interest rate, and Time in years.
  2. Pick how often interest is added under Compounding, and add a Monthly contribution if you save regularly.
  3. Press Calculate. The future value appears with the total interest, your deposits, and the effective annual rate. The chart shows each year.

How it works

A = P × (1 + r ÷ n)^(n × t)
continuous: A = P × e^(r × t)
contributions: D × ((1 + i)^m − 1) ÷ i
effective annual rate = (1 + r ÷ n)^n − 1
  • P: starting amount; r: yearly rate as a decimal; t: years
  • n: times interest is added per year (12 for monthly)
  • D: monthly deposit, added at the end of each month; m: number of months
  • i: the monthly rate that matches the chosen compounding

Examples

  • $10,000 at 5% compounded monthly for 10 years: $16,470.09. The effective annual rate is 5.1162%.
  • The same $10,000 compounded yearly grows to $16,288.95, daily to $16,486.65, and continuously to $16,487.21.
  • Adding $200 a month to that monthly-compounded account ends at $47,526.55.

Does compounding frequency matter much?

Less than people think. At 5%, moving from yearly to monthly compounding adds about 1.1% to the ending balance over 10 years, and daily adds only a little more. The rate itself and the time you leave the money invested matter far more.

Limitations

  • The rate stays fixed and deposits stay the same. Real returns vary.
  • Taxes on interest and account fees are not included.
  • Contributions are added at the end of each month.

Frequently asked questions

What is compound interest?

Interest calculated on the starting amount plus the interest already added, so the balance grows faster each year.

How much is $10,000 at 5% for 10 years?

With monthly compounding, $16,470.09. With yearly compounding, $16,288.95.

What is the effective annual rate?

The yearly growth once compounding is included. 5% compounded monthly is an effective 5.1162%, the same as an APY.

Often used together with the Compound Interest Calculator.