Compound Interest Calculator

How it works

Compound interest is interest calculated not just on the original amount you invest or deposit (the principal), but also on the interest that amount has already earned. Each time interest is added to the balance, the next round of interest is calculated on the new, larger balance — which is what makes growth accelerate over time compared with simple interest, where interest is only ever calculated on the original principal. The formula for a one-time principal grown at a fixed rate is:

A = P × (1 + r/n)^(n×t)

where A is the final balance, P is the principal, r is the annual interest rate (as a decimal), n is how many times per year interest is compounded, and t is the number of years. This calculator supports five common compounding frequencies — annually, semi-annually, quarterly, monthly, and daily — selectable from the frequency dropdown.

The compounding frequency matters because it changes how often interest gets added to the balance and starts earning its own interest. Compounding more often means interest is credited in smaller amounts more frequently, but the effect compounds on itself sooner — so a higher compounding frequency always produces a slightly higher final balance than a lower one, for the same nominal annual rate and term. The difference is usually modest for realistic rates and terms (a small uplift, not a doubling), but it isn't zero, which is why comparing two savings products by their nominal rate alone can be misleading if they compound on different schedules.

This calculator handles a single, one-time principal — it doesn't model adding regular contributions (like a fixed deposit every month) on top of the initial amount. That's a genuinely different, larger calculation (a "future value of an annuity" problem layered on top of this one), so it isn't covered here.

Examples

Classic textbook case. $1,000 invested at a 5% annual rate for 10 years, compounded annually, grows to $1,000 × (1.05)^10 ≈ $1,628.89 — about $628.89 in interest earned on top of the original $1,000.

Same numbers, compounded monthly instead. The same $1,000 at 5% for 10 years, but compounded monthly instead of annually, grows to about $1,647.01 — $18.12 more than annual compounding, purely from crediting interest twelve times a year instead of once.

Things to watch for

• This calculator models a single lump-sum investment, not regular contributions. If you're planning to add a fixed amount every month on top of an initial deposit, the final balance will be higher than what this tool shows, since it only grows the one-time principal you enter.
• The results don't account for inflation or taxes. A final balance of $1,628.89 in ten years doesn't buy as much as $1,628.89 today, and many savings and investment accounts are taxed on the interest earned — neither factor is built into this calculation.
• A higher compounding frequency gives a (slightly) higher return for the same nominal rate. If you're comparing two accounts with the same advertised annual rate but different compounding schedules, the one that compounds more often will edge out the other, even though the quoted rate looks identical.
• This is general information, not financial or investment advice. See our Disclaimer page for more on this.
• Everything runs in your browser. The numbers you enter are never sent to a server; the calculation happens locally on your device.

If you're financing a purchase rather than growing savings, the Loan Payment Calculator works out a fixed monthly payment and full amortization schedule instead. For a plain percentage calculation, the Percentage Calculator covers percent-of, percentage change, and increase/decrease.