Compound interest calculator
Enter a starting amount, a rate and a monthly deposit to see what your savings grow to and how much of it is interest.
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Balance
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- Your deposits
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- Interest earned
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- Yearly rate after compounding
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- Money doubles in
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Year by year
| Year | Deposits so far | Interest so far | Balance |
|---|
How compound interest works
With compound interest you earn interest on your interest. Each time interest is added, the next round is worked out on the bigger balance, so the growth speeds up the longer you leave it. With simple interest you only ever earn on the starting amount: 10,000 at 5% simple interest for 10 years gives 15,000.00, while compounding monthly gives 16,470.09.
The formula without deposits is A = P × (1 + r ÷ n)n × t, where 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. Monthly deposits are added at the end of each month and then earn interest too.
How often it compounds
10,000 at 5% for 10 years, with no deposits:
| Compounds | After 10 years |
|---|---|
| Yearly | 16,288.95 |
| Twice a year | 16,386.16 |
| Quarterly | 16,436.19 |
| Monthly | 16,470.09 |
| Daily | 16,486.65 |
More frequent compounding helps, but much less than the rate and the number of years. Savings accounts often quote an APY (annual percentage yield), which already includes compounding. If you have an APY, enter it as the rate and choose Yearly.
Small deposits, long time
Monthly deposits at 7% a year, compounded monthly:
| Start | Each month | Years | You put in | Balance |
|---|---|---|---|---|
| 0.00 | 200.00 | 10 | 24,000.00 | 34,616.96 |
| 0.00 | 200.00 | 20 | 48,000.00 | 104,185.33 |
| 0.00 | 200.00 | 30 | 72,000.00 | 243,994.20 |
| 10,000.00 | 0.00 | 30 | 10,000.00 | 81,164.97 |
Doubling the time from 10 to 20 years far more than doubles the balance, because the interest keeps earning interest.
Saving for retirement
Retirement savings are compound interest over a long time, with regular deposits. Starting from nothing, this is what monthly deposits grow to at three steady yearly returns, compounded monthly:
| Each month | Years | You put in | At 4% | At 6% | At 8% |
|---|---|---|---|---|---|
| 200.00 | 20 | 48,000.00 | 73,354.93 | 92,408.18 | 117,804.08 |
| 200.00 | 30 | 72,000.00 | 138,809.88 | 200,903.01 | 298,071.89 |
| 500.00 | 20 | 120,000.00 | 183,387.31 | 231,020.45 | 294,510.21 |
| 500.00 | 30 | 180,000.00 | 347,024.70 | 502,257.52 | 745,179.72 |
| 500.00 | 40 | 240,000.00 | 590,980.67 | 995,745.37 | 1,745,503.92 |
The years matter as much as the amount: at 6%, 500 a month grows to 502,257.52 after 30 years but 995,745.37 after 40, about 2.0 times as much, while the money put in goes up by only a third. Real retirement accounts don't grow at a fixed rate, and taxes, fees and inflation change what the money is worth, so treat these as rough planning figures. For an employer plan or a pension, the plan's own statements and tools give the numbers that apply to you.
The rule of 72
A quick way to estimate how long money takes to double: divide 72 by the yearly rate. It is close for everyday rates:
| Rate | Rule of 72 | Exact (yearly compounding) |
|---|---|---|
| 3% | 24.0 years | 23.4 years |
| 4% | 18.0 years | 17.7 years |
| 6% | 12.0 years | 11.9 years |
| 8% | 9.0 years | 9.0 years |
| 10% | 7.2 years | 7.3 years |
The US Securities and Exchange Commission explains compounding and has its own calculator at Investor.gov.
Real returns change: savings rates move, investments can lose value, and tax, fees and inflation reduce what you keep. This calculator assumes a fixed rate and is for planning only, not financial advice.
Questions
How is compound interest calculated?
Each time interest is added, it is worked out on the balance including the interest already earned. Without deposits the formula is A = P × (1 + r ÷ n)n × t, explained in the section above. The calculator does the same sum and adds your monthly deposits on top.
How much is compound interest after 2 years?
It depends on the amount, the rate and how often it compounds. 1,000 at 5% compounded yearly grows to 1,102.50 after 2 years, so 102.50 is interest. Compounded daily it reaches 1,105.16. Enter your own numbers above with Years set to 2.
Can it work out daily compound interest?
Yes. Set Compound to Daily. The table under How often it compounds shows how little daily compounding adds over monthly for the same rate.
What is the difference between simple and compound interest?
Simple interest is paid only on the starting amount, so it grows by the same sum every year. Compound interest is also paid on the interest already earned, so each year adds a little more than the one before.
How do I calculate compound interest in Excel?
Use the FV function. For 10,000 at 5% compounded monthly for 10 years with 100 added each month, type =FV(5%/12, 10*12, -100, -10000). The minus signs mark money you pay in. The answer matches this calculator.
Which currency does it use?
Any. Enter amounts in your own currency; the math is the same.
Can I leave the starting amount at 0?
Yes. Enter 0 to see what monthly deposits alone grow to.
What if I add money once a year instead?
Divide the yearly amount by 12 and enter that as the monthly deposit. The result will be slightly higher than adding it all at the end of the year, because part of it starts earning sooner.