Compound interest is interest earned on interest. Each period, the interest is added to the balance, and the next period’s interest is calculated on that larger amount. Over short periods the effect is modest; over decades it does most of the work. This calculator projects a starting deposit plus regular contributions, lets you match any compounding schedule, and breaks the final balance into what you put in and what interest added.
How to use the compound interest calculator
- Enter your initial deposit and an optional regular contribution, then choose how often you contribute.
- Enter the annual interest rate and the compounding frequency stated by your bank or fund.
- Enter the number of years and whether contributions arrive at the start or end of each period.
- Optionally raise contributions by a percentage each year, and add an inflation rate to see the result in today’s dollars.
- Read the balance, the APY and the stacked chart, and scroll the year-by-year table.
Compound interest formulas
A single deposit grows as:
Regular contributions C made p times a year use the rate per contribution period, i = (1 + r/n)n/p − 1, over N = p × t periods:
For contributions at the start of each period, multiply the contribution part by (1 + i). With continuous compounding, (1 + r/n)nt becomes ert.
Worked example
You start with $10,000, add $200 a month, and earn 7% compounded monthly for 10 years.
Monthly rate: i = 0.07 ÷ 12 = 0.0058333; N = 120; (1 + i)120 = 2.009661
Initial deposit: 10,000 × 2.009661 = $20,096.61
Contributions: 200 × (2.009661 − 1) ÷ 0.0058333 = $34,616.96
Total: $54,713.58 — $34,000 deposited and $20,713.58 of interest
Interest earned in year 1 is $801.42; by year 10 it is $3,600.02, because it is calculated on a much larger balance.
Time matters more than frequency
Compounding frequency for $10,000 at 7% over 10 years:
| Compounding | Final balance | APY |
|---|---|---|
| Annually | $19,671.51 | 7.0000% |
| Quarterly | $20,015.97 | 7.1859% |
| Monthly | $20,096.61 | 7.2290% |
| Daily | $20,136.18 | 7.2501% |
| Continuously | $20,137.53 | 7.2508% |
Now compare time. Keeping the $10,000 start and $200 a month at 7% monthly, the balance reaches $54,713.58 after 10 years, $144,572.72 after 20 and $325,159.17 after 30 — while total deposits only grow from $34,000 to $58,000 to $82,000. The last decade adds more than the first two combined.
Getting the most from compounding
Start early
Every year of delay removes a year from the end of the curve, which is where growth is largest.
Keep contributing, and raise the amount
Automatic monthly deposits and yearly increases matched to raises compound alongside the balance. Try the yearly increase field to see the effect.
Watch fees and taxes
A 1% annual fee or tax drag reduces the effective rate, and over decades that can cost a large share of the final balance. Tax-advantaged accounts such as 401(k)s and IRAs let compounding work on the full amount.
To compare quoted rates with different compounding, use the effective annual rate calculator. For a quick estimate of doubling time, try the rule of 72 calculator.
Projections assume a constant rate. Savings rates change and investment returns vary, so treat the results as estimates rather than guarantees.
Frequently asked questions
What is the compound interest formula?
For a single deposit, A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years. Regular contributions add C × ((1 + i)^N − 1) ÷ i, where i is the rate per contribution period and N the number of contributions.
How much will $10,000 grow in 10 years at 7%?
Compounded monthly, $10,000 grows to $20,096.61. Adding $200 at the end of every month brings the total to $54,713.58: $34,000 of deposits and $20,713.58 of interest.
How much difference does compounding frequency make?
Less than most people expect. $10,000 at 7% for 10 years grows to $19,671.51 with annual compounding, $20,096.61 with monthly and $20,136.18 with daily. The rate and the time invested matter far more.
What happens if I contribute at the start of each month instead?
Each deposit earns one extra month of interest. In the default example the balance after 10 years rises from $54,713.58 to $54,915.51.
Does the calculator account for taxes and inflation?
Taxes and fees are not included. You can enter an inflation rate to see the final balance in today's dollars, which shows its real purchasing power.