Growth of savings with compounding and regular deposits.
Compound interest is interest earned on your interest. This compound interest calculator shows how a starting amount and regular monthly deposits grow over time, how much of the final balance is your own money and how much is interest, and the effective annual rate (APY) for your compounding frequency. A chart and a year-by-year table show the growth.
Quick answer: the compound interest formula is A = P(1 + r/n)^(nt), where P is the starting amount, r is the annual rate as a decimal, n is the number of times interest is added per year, and t is the number of years. $10,000 at 5% compounded monthly for 10 years grows to $16,470.09.
How to Use the Compound Interest Calculator
- Initial deposit: what you start with.
- Monthly contribution (optional): what you add each month.
- Annual interest rate.
- Years.
- Compounding: annually, semi-annually, quarterly, monthly or daily.
- Contributions made at: the start or end of each month. Deposits at the start earn one extra month of interest each time.
You get the future value, total deposits, interest earned and the APY, plus a growth chart and a year-by-year table.
Compound Interest Examples
$10,000 plus $200 a month at 5%, compounded monthly, for 10 years.
You deposit $34,000 in total. The balance grows to $47,526.55, so $13,526.55 is interest.
$200 a month for 30 years at 7%.
You deposit $72,000. The balance grows to about $243,994, more than three times what you paid in. This is why starting early matters so much.
How Often Interest Compounds
$10,000 at 5% for 10 years, with no extra deposits:
| Compounding | Final balance | APY |
|---|---|---|
| Annually | $16,288.95 | 5.0000% |
| Quarterly | $16,436.19 | 5.0945% |
| Monthly | $16,470.09 | 5.1162% |
| Daily | $16,486.65 | 5.1267% |
More frequent compounding helps, but the difference between monthly and daily is small. The rate and the time matter far more.
APY vs APR
APR is the stated yearly rate. APY (annual percentage yield) includes the effect of compounding, so it shows what you really earn in a year. When comparing savings accounts, compare APYs.
APY = (1 + r/n)ⁿ − 1
The Rule of 72
To estimate how long it takes money to double, divide 72 by the interest rate. At 6%, money doubles in about 72 ÷ 6 = 12 years. At 9%, about 8 years. It is a quick mental check, not an exact figure.
Compound vs Simple Interest
Simple interest is paid only on the original amount. Compound interest is also paid on interest already earned. On $5,000 at 6% for 3 years, simple interest earns $900, while monthly compounding earns about $983. The gap grows quickly over longer periods. See the simple interest calculator for the simple version.
Compounding works against you on debt too. Credit card balances and loans grow the same way when they are not paid down. The loan calculator shows the cost of borrowing.
What This Calculator Does Not Include
- Taxes on interest or investment growth.
- Inflation, which reduces what the final balance can buy.
- Changing rates. Savings rates and investment returns vary over time. Investments can also fall in value.
Compound Interest FAQs
How is compound interest calculated?
A = P(1 + r/n)^(nt) for a single deposit. With regular deposits, each one is added and grows from the date it is made. The calculator handles both together.
What is the difference between monthly and daily compounding?
Daily compounding adds interest 365 times a year instead of 12. The result is slightly higher, but on most savings the difference is only a few dollars a year.
Does it matter if I deposit at the start or end of the month?
Yes, a little. Deposits at the start of the month earn interest for one extra month each time.
Can I use this for investments?
You can enter an expected return, but investment returns are not fixed and can be negative. Treat the result as an illustration, not a forecast.
How we checked this page: every balance in the examples and the compounding table was calculated with the formulas above and matches the calculator.
These results are estimates for planning and are not financial advice. Actual returns depend on the account or investment, fees and taxes.