Compound interest earns interest on interest. With regular deposits, a modest monthly amount grows into a large sum: $200 a month at 5% for 30 years becomes about $166,000, of which $94,000 is interest.
How to use the Compound Interest Calculator
- Initial balance
- Annual interest rate
- Term
- Compounding frequency
- Additional deposit (negative for withdrawal)
- Deposit frequency
- Deposit timing
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the initial balance, interest rate, term and compounding frequency, plus any regular deposit (or a negative amount for withdrawals) with its frequency and timing.
Inputs explained
| Field | What to enter |
|---|---|
| Initial balance | Amount in your currency |
| Annual interest rate | In % |
| Term | Units: years, months |
| Compounding frequency | Choose one: Yearly, Semi-annually, Quarterly, Monthly … |
| Additional deposit (negative for withdrawal) | Amount in your currency |
| Deposit frequency | Choose one: Monthly, Bi-weekly, Weekly, Quarterly … |
| Deposit timing | Choose one: End of each period, Beginning of each period |
What each result means
- Total compound interest = [Final balance] – [Total principal (initial + deposits)]
- Effective annual rate (APY) = effr([Annual interest rate]÷100, [Compounding frequency])×100
- Interest with simple interest (initial balance only) = [Initial balance]×[Annual interest rate]÷100×[Term]
Example values
How the main result changes when Initial balance changes and everything else stays at the example values above:
| Initial balance | Final balance |
|---|---|
| 2,500 | 19,710.45 |
| 3,750 | 21,769.21 |
| 5,000 | 23,827.98 |
| 6,250 | 25,886.74 |
| 7,500 | 27,945.5 |
| 10,000 | 32,063.02 |
Formula
A = P(1 + r/n)^(nt) + PMT × [(1 + i)^N − 1] ÷ i × (1 + i × timing)
i = interest rate per deposit period; N = number of deposits
Worked example
Inputs: Initial balance: $5,000; Annual interest rate: 5 %; Term: 10 years; Compounding frequency: Monthly; Additional deposit (negative for withdrawal): $100; Deposit frequency: Monthly; Deposit timing: Beginning of each period.
Results: Final balance = $23,827.98; Total principal (initial + deposits) = $17,000.00; Total compound interest = $6,827.98; Effective annual rate (APY) = 5.116 %; Interest with simple interest (initial balance only) = $2,500.00.
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt), plus the future value of any regular deposits.
How often should interest compound?
More often is better for savers, but the difference between monthly and daily is small.
What is the rule of 72?
Divide 72 by the interest rate to estimate the years to double your money.
Sources
Guides on this topic
- APR vs APY: What’s the Difference and How to Convert Them: APR leaves out compounding, APY includes it. See the conversion formulas, why banks quote APY on savings and APR on loans, and how fees change a loan's APR.
- How Does Compound Interest Work? Formula, Examples and the Rule of 72: Compound interest explained with real numbers: the formula, why compounding frequency matters, the rule of 72, monthly contributions over 30 years and how the same math works against you on debt.