Compound Interest Calculator

For a single deposit the formula is A = P × (1 + r/n)^(n × t), where P is the starting amount, r the yearly rate as a decimal, n the number of times interest is compounded per year and t the number of years. For 10,000 at 5% compounded monthly for 10 years: A = 10,000 × (1 + 0.05/12)^120 = 16,470.09, so the interest earned is 6,470.09. With continuous compounding the formula becomes A = P × e^(r × t).

More frequent compounding earns a little more, because interest starts earning interest sooner. The difference is real but smaller than most people expect. Here is 10,000 at 5% for 10 years.

Regular saving usually matters more than the starting amount. Depositing 200 a month for 30 years at 7% compounded monthly adds up to 72,000 in deposits but grows to about 244,000, because the early deposits compound for decades. Starting ten years later and saving for only 20 years gives about 104,000. The calculator assumes each deposit earns the same effective monthly rate from the month it is paid; choose Start of month if you save at the beginning of each month, which earns one extra month of interest on every deposit.

The effective annual rate, also called APY or AER, is the yearly rate that would give the same result with yearly compounding; it lets you compare accounts that compound differently. The Rule of 72 estimates doubling time: divide 72 by the rate, so money at 6% doubles in about 12 years (the exact figure is 11.9). Inflation works the other way: at 3% inflation, prices double in about 24 years, so the calculator can divide your result by the growth in prices to show it in today's money.

Real savings and investments are affected by taxes on interest, account fees, rates that change over time and, for shares and funds, returns that go up and down from year to year. Use the result as an estimate to compare scenarios, not as a promise of what an account or investment will pay. This calculator is for information only and is not financial advice.