Compound Interest Calculator
See how your savings can grow when interest earns more interest. Enter a starting amount, an optional monthly contribution, and an interest rate to get your future balance and a year-by-year breakdown.
Future balance
54,713.58
Check the highlighted fields to see your result.
- Total contributions
- 34,000.00
- Interest earned
- 20,713.58
Year-by-year breakdown
| Year | Contributions | Interest | Balance |
|---|---|---|---|
| 1 | 12,400.00 | 801.42 | 13,201.42 |
| 2 | 14,800.00 | 1,834.27 | 16,634.27 |
| 3 | 17,200.00 | 3,115.28 | 20,315.28 |
| 4 | 19,600.00 | 4,662.39 | 24,262.39 |
| 5 | 22,000.00 | 6,494.83 | 28,494.83 |
| 6 | 24,400.00 | 8,633.24 | 33,033.24 |
| 7 | 26,800.00 | 11,099.74 | 37,899.74 |
| 8 | 29,200.00 | 13,918.03 | 43,118.03 |
| 9 | 31,600.00 | 17,113.55 | 48,713.55 |
| 10 | 34,000.00 | 20,713.58 | 54,713.58 |
Results are estimates for information only and do not constitute financial, medical, or legal advice.
How compound interest works
With compound interest you earn interest not only on the money you put in, but also on the interest you have already earned. Each time interest is added to your balance, the next round is calculated on a slightly bigger amount, so growth speeds up the longer you leave the money alone.
This calculator adds interest as often as you choose (annually, semiannually, quarterly, monthly, or daily) and assumes your monthly contributions are made at the end of each month. The result doesn't include taxes, fees, or inflation.
If interest isn't added monthly (for example, annually, semiannually, quarterly, or daily) but you contribute every month, the calculator converts the annual rate into an equivalent monthly rate, (1 + r / n)n / 12 − 1, and applies it every month. That way each contribution earns interest from the month it's made, and over a full year the initial deposit grows exactly as the formula below says. Banks don't all work this way: some only pay interest on money that stayed in the account for a whole period, so your bank's figure may be slightly different.
The formula
For a single deposit with no extra contributions, the future balance is:
A = P × (1 + r / n)n × t
- A: balance at the end
- P: initial deposit
- r: annual interest rate as a decimal (5% = 0.05)
- n: number of times interest is added per year (12 for monthly)
- t: number of years
Monthly contributions follow the same idea: each one grows from the month it's added until the end. The calculator adds everything up month by month, which gives the same result as the formula.
Worked example
You deposit 1,000 at 5% a year, compounded annually, and leave it for 3 years with no extra contributions.
- Year 1: 1,000.00 × 1.05 = 1,050.00
- Year 2: 1,050.00 × 1.05 = 1,102.50
- Year 3: 1,102.50 × 1.05 = 1,157.63
With the formula: 1,000 × (1 + 0.05 / 1)1 × 3 = 1,000 × 1.157625 = 1,157.63. You earn 157.63 in interest, which is 7.63 more than the 150 you would get with simple interest, because in years 2 and 3 the interest also earns interest.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the money you put in. Compound interest is calculated on that money plus the interest already added to it, so the balance grows a little faster every period.
Does compounding more often make a big difference?
It helps, but less than most people expect. At 5% a year, 1,000 grows to 1,050.00 after one year with annual compounding and to about 1,051.27 with daily compounding. The interest rate and the number of years matter much more.
Which interest rate should I enter?
Enter the nominal annual rate offered by your bank or investment and choose how often it compounds. If you only know the APY (annual percentage yield), enter it with annual compounding, because the APY already includes the effect of compounding. For investments whose returns change from year to year, an average rate only gives a rough estimate.
Are taxes, fees, and inflation included?
No. The result is your balance before taxes and fees, and it isn't adjusted for inflation. For a rough idea of what it's worth in today's money, subtract the expected inflation rate from the interest rate and calculate again.
Which currency does the calculator use?
Any currency. Enter amounts in your own currency and the results will be in that same currency.