Money
Compound interest calculator
Enter a starting balance, a rate, how often interest compounds, and an optional monthly deposit. The rate is your assumption, not a forecast.
- Deposits$34,000.00
- Interest$13,526.55
What this means
- After 10 years the balance is $47,526.55, and $13,526.55 of it is interest.
- Interest makes up about 28.5% of the ending balance. That share grows the longer the money stays in.
- Taxes, fees, and changes in the rate are not included.
What if
About this calculator
What this calculator does
It projects the balance of savings or an investment that earns a fixed rate, with interest added to the balance on a schedule you pick. Monthly deposits are optional.
How it is calculated
starting part = P * (1 + r / n)^(n * t)
monthly rate m = (1 + r / n)^(n / 12) - 1
deposit part = D * ((1 + m)^(12 * t) - 1) / m
P is the starting balance, r the annual rate as a decimal, n the compounding periods per year, t the years, and D the monthly deposit made at the end of each month.
How to read the result
The ending balance is the starting balance, all deposits, and all interest. The effective annual rate shows what the stated rate earns in a year once compounding is counted.
Assumptions and limits
The rate stays the same for the whole period. Real savings rates change, and investment returns go up and down. Taxes and fees are not included.
Sources and method
Standard arithmetic with no outside data. The formula is shown under How it is calculated, and unit tests check worked examples, including edge cases.
This page uses arithmetic only, with no outside data.
Questions
What is compound interest?
Interest that is added to the balance and then earns interest itself. Over long periods it grows faster than simple interest.
Does compounding frequency matter much?
A little. Daily compounding earns slightly more than monthly at the same stated rate. The effective annual rate shows the difference.
What rate should I use?
Use the rate your account pays, or a rate you want to test. This page does not predict returns.
Are deposits made at the start or end of the month?
At the end of each month. Deposits at the start would earn one more month of interest each.
Is APY the same as the effective annual rate?
Yes. APY is the effective annual rate a bank account earns once compounding is included.