Compound Interest Calculator

How to use the Compound Interest Calculator

1. Enter what you're starting with and how much you plan to add each month (use 0 if nothing).
2. Set the expected annual interest rate or return, and how many years the money will grow.
3. Pick how often interest compounds. Savings accounts often compound daily or monthly.
4. Read the future balance and use the yearly table to see how interest starts to snowball.

How it's calculated

Compound interest means you earn interest on your interest. For a single deposit, the classic formula is:

where P is the starting amount, r the yearly rate, n the number of compounding periods per year, and t the number of years. Because contributions here are monthly, the tool converts the yearly rate into an equivalent monthly rate, (1 + r ÷ n)^{n ÷ 12} − 1, then adds interest and your deposit at the end of every month.

Frequently asked questions

What rate should I use?
Enter the annual interest rate and pick how often it compounds. If your bank only gives an APY (annual percentage yield), enter the APY and choose Yearly compounding, since APY already includes the effect of compounding. For stock market investing, many people plan with a conservative long-term average, but returns are never guaranteed and can be negative in some years.

Does compounding frequency matter much?
It matters a little. More frequent compounding earns slightly more, but the difference between monthly and daily is small. The rate and the number of years have a much bigger effect.

When are contributions added?
At the end of each month. Adding money at the start of the month would earn a little more interest.

Does this include taxes or inflation?
No. The results are before taxes, fees and inflation. To get a rough picture in today's dollars, you can subtract an expected inflation rate from your interest rate.