Compound Interest Calculator

Follow these steps to estimate your investment growth:

Enter the initial deposit: Add the amount you plan to invest or save at the beginning.

Enter the annual interest rate: Specify the annual rate as a percentage.

Set the investment period: Enter how many years you plan to keep the money invested.

Choose the compounding frequency: Select annual, semiannual, quarterly, monthly, or daily compounding.

Add recurring contributions (optional): Enter an additional amount if you plan to deposit money regularly.

Choose the contribution frequency: Select monthly, quarterly, or annual contributions.

Select a currency: Choose the currency in which you want to view the results.

Set decimal precision: Choose how many decimal places appear in the calculated values.

The results update as you change the inputs. You can use the reset control to start a new calculation or copy a summary of your results.

Estimate how your savings or investments may grow over time with compound interest. Enter an initial deposit, annual interest rate, and investment period. You can also add recurring contributions and choose how often they are made and how frequently interest compounds.

The calculator projects your future balance, interest earned, total invested amount, and effective annual rate. It also provides a year-by-year breakdown to help you understand how your investment may grow.

Compound interest is interest calculated on both the original amount of money and the interest accumulated over previous periods.

When interest is added to your balance, it becomes part of the amount used to calculate interest in the next compounding period. This means your investment can earn interest on previously earned interest.

For example, if you deposit $1,000 into an account earning 5% annual interest, you earn $50 in interest during the first year. If that interest remains in the account, the balance becomes $1,050. In the next year, interest is calculated on $1,050 rather than only the original $1,000.

Over longer periods, this effect can make a significant difference to investment growth.

The main difference is how interest is calculated.

Compound interest: Interest is calculated on the principal and previously accumulated interest.

Simple interest: Interest is calculated only on the original principal.

For example, with a $1,000 deposit and a 5% annual interest rate over three years:

This example assumes annual compounding and no additional deposits or withdrawals. Compound interest produces a higher balance because previously earned interest also earns interest.

The standard compound interest formula is:

A = P(1 + r/n)^(nt)

Where:

A = Final amount, including principal and accumulated interest.

P = Initial principal or deposit.

r = Annual interest rate expressed as a decimal.

n = Number of compounding periods per year.

t = Investment period in years.

For example, an annual interest rate of 5% is entered as 0.05 in the formula.

The formula calculates growth from an initial deposit without additional contributions. When you make recurring deposits, each contribution has its own investment period and earns interest from the time it is added. The calculator accounts for these contributions separately when projecting the final balance.

The calculator provides several figures to help you evaluate the projected investment.

Future value: The estimated balance at the end of the investment period, including the initial deposit, recurring contributions, and accumulated interest.

Interest earned: The projected growth generated by interest, excluding the money you deposited.

Total invested: The initial deposit plus all recurring contributions included in the projection.

Effective annual rate (EAR): The annual interest rate after accounting for the selected compounding frequency.

Year-by-year breakdown: A schedule showing contributions, accumulated interest, and projected balance for each year.

The effective annual rate helps compare different compounding frequencies. When the nominal annual rate is the same, more frequent compounding generally produces a higher effective annual rate.

Compounding frequency determines how often earned interest is added to the balance. Common options include:

Consider an initial deposit of $10,000 earning 5% annual interest for 10 years, with no additional contributions.

These figures use the standard compound interest formula, assume a constant nominal annual rate, and use 365 compounding periods for daily compounding. They are illustrative estimates, not guaranteed account returns.

The difference between annual and monthly compounding is approximately $181.15 over this example's 10-year period.

Regular contributions can increase the future value of an investment because each deposit has additional time to earn interest.

For example, consider these assumptions:

Initial deposit: $10,000

Annual interest rate: 5%

Investment period: 10 years

Compounding: Monthly

Additional contribution: $100 per month

Contribution timing: At the end of each month

Under these assumptions:

This example assumes that each monthly contribution is added at the end of the month and earns interest from the following compounding period. Actual results may differ if deposits are made at the beginning of each period or according to different account rules.

This calculator provides an estimate based on the values and schedules you enter. Actual investment results may differ for several reasons:

Changing interest rates: The calculation assumes the entered annual rate remains constant throughout the investment period.

Fees: Account fees and investment expenses can reduce the amount you earn.

Taxes: Interest or investment earnings may be subject to taxes.

Contribution timing: Deposits made at the beginning or end of a period can produce different results.

Account terms: Financial institutions may use different calculation methods, day-count conventions, or compounding rules.

The calculator does not guarantee future returns. Use its results as an illustration of potential growth rather than a promise of what an account will pay.