Compound interest calculator
Find out what a balance will grow to over time, with or without regular deposits. The chart separates the money you put in from the interest it earned, which is the part that makes compounding so powerful.
Uses a standard published formula, explained below. Everything is calculated in your browser, and nothing you enter is sent to a server. This is not financial advice.
Your investment
Final balance
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Total paid in
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Interest earned
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Growth multiple
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Show the working
The standard compound interest formula, with your figures substituted in:
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How to use this calculator
- Starting amount: the amount in the account today. Enter zero if you are starting from nothing and relying only on regular deposits.
- Annual interest rate: the yearly rate before inflation and tax. Enter 8 for 8%.
- Time period: how long the money stays invested, in years or months.
- Regular deposit: optional. Choose monthly, quarterly or yearly from the dropdown beside it. Regular deposits often make a bigger difference to the result than the interest rate does.
- Compounding frequency: how often interest is calculated and added to the balance. Most savings accounts compound monthly or daily, while bonds and fixed deposits often compound once a year.
The compound interest formula
For a single amount with no further deposits, the formula is:
A = P(1 + r/n)nt
P is the starting amount, r is the annual rate as a decimal, n is the number of times interest is added each year, and t is the number of years. When you add monthly deposits, the calculator works month by month instead and compounds each deposit separately, which is more accurate and easier to chart.
Compounding frequency matters less than you might think
Switching from yearly to daily compounding at the same rate sounds like a big change, but it usually is not. At 8% a year, 10,000 grows to about 46,600 over twenty years with yearly compounding, and to about 49,500 with daily compounding. The difference is real but small compared with the effect of time or of a higher rate.
It is still worth knowing when you compare accounts. The same quoted rate is worth slightly more when it compounds daily than when it compounds yearly. That is why many countries require banks to quote an effective annual rate as well, and it is that effective rate you should compare.
What really drives the result
Time matters most, by a wide margin. Growth is exponential, so the later years add far more than the early ones. At 8%, a balance of 10,000 earns about 800 in its first year and about 3,450 in its twentieth year. The rate and the original money are the same, yet the yearly gain is four times larger. This is the strongest argument for starting early instead of saving more later.
Small differences in rate grow over time. Over thirty years, money growing at 8% ends up about 75% larger than money growing at 6%, even though the rates differ by only two points.
Regular deposits do most of the work at first, and growth takes over later. Add a monthly deposit and watch the two lines on the chart. The point where the interest earned overtakes the total you have paid in is the moment your money starts doing more of the work than you are.
What the result does not include
Inflation reduces what the final amount can buy. At 4% inflation, money loses half its value in about eighteen years, so an 8% return is worth roughly 4% a year in real terms. To see the result in today's money, enter your expected return minus inflation as the rate.
Tax on interest is charged in most countries, often every year, which reduces the balance that keeps compounding. Tax-free savings accounts exist because this drag adds up over long periods.
Not financial advice. This is arithmetic on a rate you choose, not a forecast. No investment returns the same rate every year, and real portfolios can have bad years at bad times. Speak to a qualified adviser before you make investment decisions.
Frequently asked questions
What is compound interest?
Compound interest is interest calculated on your original amount plus all the interest already added. Because each period's interest joins the balance that earns interest next time, growth speeds up over time instead of staying flat.
How is compound interest different from simple interest?
Simple interest is always calculated on the original amount only, so 10,000 at 8% simple interest earns 800 every year. With compound interest, the yearly gain grows because the balance it is calculated on keeps growing.
Does compounding frequency make a big difference?
Less than most people expect. Moving from yearly to daily compounding at the same rate adds only a few percent to a twenty-year result. Time and the interest rate matter far more.
What is the rule of 72?
It is a quick way to estimate how long money takes to double: divide 72 by the annual interest rate. At 8%, money doubles in about nine years. The rule works best for rates between about 6% and 10%.
Should I use my nominal or real rate of return?
Use the real return, which is your expected return minus inflation, if you want to know what the money will be able to buy. Use the nominal rate if you want the actual future balance.
Why does my bank show a different figure?
Banks often quote an effective annual rate, which already includes the effect of compounding, while you may have entered the nominal rate. Check which rate you were given before you compare.