How to use the Compound Interest Calculator
- 1
Choose your currency and enter the amount you are starting with. It can be 0 if you are only making regular deposits.
- 2
Add a regular contribution, choose monthly or yearly, and say whether you pay in at the start or the end of each period.
- 3
Set the yearly interest rate and the compounding frequency, from yearly to daily.
- 4
Pick how many years to grow the money and, if you plan to save more over time, the percentage you will raise contributions by each year.
- 5
Read the final balance, total contributions, total interest and APY, then check the chart and table to see the growth year by year.
The compound interest formula with a worked example
For a single deposit the formula is A = P × (1 + r ÷ n)^(n × t). P is the starting amount, r is the yearly rate as a decimal, n is how many times a year interest is added and t is the number of years. Each time interest is added, it joins the balance and starts earning interest of its own.
Put in $10,000 at 5% compounded monthly for 10 years. The monthly rate is 0.05 ÷ 12 = 0.0041667 and there are 120 compounding periods. 1.0041667 raised to the 120th power is about 1.647009, so the balance becomes $16,470.09. Simple interest at the same rate would pay $500 a year, or $5,000 in total, so compounding adds an extra $1,470.09.
Regular deposits are handled one period at a time. Each payment is added to the balance and then earns interest for the periods that remain. When deposits and compounding happen on different schedules, for example monthly deposits with daily compounding, the calculator converts the rate to the equivalent rate per deposit period so the result stays exact.
Contributions do most of the heavy lifting early on
Start with $5,000, add $300 at the end of every month and earn 6% compounded monthly for 20 years. You pay in $77,000 in total and finish with $155,163.29, so interest contributes $78,163.29, slightly more than you saved. Open the year-by-year table and you will see the yearly interest figure overtake your yearly deposits about halfway through.
Two small changes make a visible difference:
- Paying at the start of each month instead of the end gives every deposit one extra month of interest, lifting the balance to $155,856.35.
- Raising the $300 by 3% each year, roughly in step with pay rises, brings total contributions to $101,733.35 and the final balance to $192,262.36.
Time matters even more than the amount. Saving $200 a month for 40 years at 6% grows to $398,298.15, while saving $400 a month for 20 years reaches $184,816.36. Both put in exactly $96,000.
Does compounding frequency matter? A comparison
The more often interest is added, the faster the balance grows, but the gains shrink quickly. Here is $10,000 at a nominal 5% for 10 years:
| Compounding | Balance after 10 years | Effective annual rate (APY) |
|---|---|---|
| Yearly | $16,288.95 | 5.000% |
| Half-yearly | $16,386.16 | 5.062% |
| Quarterly | $16,436.19 | 5.095% |
| Monthly | $16,470.09 | 5.116% |
| Daily | $16,486.65 | 5.127% |
Moving from yearly to monthly compounding adds about $181 here, but monthly to daily adds only $16.56. The useful lesson is to compare accounts on their effective annual rate, not on how often they compound. In the US that figure is called APY. In the UK, savings accounts quote AER, and in many other countries it is the effective annual rate or EAR. All three answer the same question: what would one year of interest be, once compounding is counted?
The Rule of 72: a quick way to check any rate
To estimate how long money takes to double, divide 72 by the yearly rate in percent. It works best between about 6% and 10% and is surprisingly close elsewhere.
| Rate per year | Rule of 72 estimate | Exact doubling time |
|---|---|---|
| 3% | 24.0 years | 23.45 years |
| 6% | 12.0 years | 11.90 years |
| 8% | 9.0 years | 9.01 years |
| 12% | 6.0 years | 6.12 years |
The rule also works in reverse for costs. Inflation of 3% halves the buying power of cash in roughly 24 years, and a credit card at 24% doubles an unpaid balance in about three years.
What the projection leaves out
The calculator assumes a fixed rate for every year. Savings rates move with central bank policy, and investment returns go up and down, so a long projection with a steady 7% is a scenario, not a promise. Taxes on interest, account fees, inflation and withdrawals are not included, and each can reduce the real result considerably.
Treat the figures as an estimate for planning, not as financial advice. For tax-advantaged accounts, such as a 401(k) or IRA in the US, an ISA in the UK or a TFSA in Canada, check the contribution limits and rules published by your tax authority or provider.
Frequently asked questions
How much will $10,000 grow in 10 years with compound interest?
At 5% compounded monthly it grows to $16,470.09, and at 5% compounded yearly it reaches $16,288.95. At 7% compounded monthly it would be about $20,097. Change the rate and years above to see your own figure.
What is the difference between APR and APY?
APR is the nominal yearly rate before compounding. APY, the effective annual rate, includes the effect of compounding, so it is always equal to or higher than the APR. A 5% rate compounded monthly has an APY of 5.116%.
Is daily compounding much better than monthly?
Only slightly. On $10,000 at 5% for 10 years, daily compounding earns $16.56 more than monthly. A higher rate or a longer time frame makes far more difference than the compounding schedule.
Should I make contributions at the start or end of the month?
Paying in at the start gives each deposit one extra period of interest, so the final balance is a little higher. If your salary arrives at the end of the month, end-of-period is the realistic setting.
Does this calculator account for inflation or tax?
No. It shows the nominal balance before tax. To get a rough real-terms figure, subtract the expected inflation rate from your interest rate and run the calculation again.
How is compound interest different from simple interest?
Simple interest is paid only on the original amount, so it grows in a straight line. Compound interest is paid on the balance including earlier interest, so the growth speeds up every year.
Last updated on November 9, 2026