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Compound Interest Calculator

See how savings grow over time with compound interest, including the effect of paying in regularly.

Runs entirely in your browser

Please note

This is a mathematical projection at a fixed rate, not a forecast. Real returns vary, and investments can fall as well as rise. It is not investment advice.

How to use the Compound Interest Calculator

  1. 1Enter your starting balance, the annual interest rate and how long you are investing for.
  2. 2Choose how often interest is compounded.
  3. 3Add a regular contribution if you plan to keep paying in, and say how often.
  4. 4Read the final balance, then open the yearly table to see how it built up.

How it works

Compounding means interest earns interest. Each period the balance is multiplied by one plus the periodic rate, so growth accelerates: the second year earns interest on the first year's interest, and so on.

Compounding frequency matters less than people expect. Moving from annual to monthly compounding at 7% adds roughly a fifth of a percentage point to the effective annual rate — real, but small next to the effect of the rate itself or the time invested.

Regular contributions usually dominate the outcome over long periods. Whether you pay in at the start or end of each period changes the result slightly, because a deposit made at the start earns one extra period of interest; the tool lets you choose.

All balances are tracked in whole cents so the yearly table adds up exactly.

The formula

A = P(1 + r/n)^(nt) + PMT × (((1 + r/n)^(nt) − 1) ÷ (r/n))
A
final balance
P
starting principal
r
annual interest rate as a decimal
n
compounding periods per year
t
number of years
PMT
the regular contribution

The second term is the future value of the contributions; it is multiplied by (1 + r/n) when deposits are made at the start of each period.

Worked example

5,000 invested for 10 years at 7%, compounded monthly, plus 200 a month

  1. The opening 5,000 grows to about 10,048 on its own.
  2. 120 monthly deposits of 200 total 24,000 contributed.
  3. Those deposits grow to roughly 34,617.

Result: About 44,665 in total, of which around 15,665 is interest.

Frequently asked questions

What is the rule of 72?
Dividing 72 by the annual percentage rate gives a rough number of years for money to double. At 8%, that is about 9 years. It is a good mental check on any projection.
Does compounding frequency make much difference?
Less than most people assume. At 7%, annual compounding yields 7.00% effective and monthly yields 7.23%. Time and the rate itself matter far more.
Should I contribute at the start or end of the period?
The start, if you can. Each deposit then earns one extra period of interest, which compounds over the years into a meaningful difference.
Is inflation taken into account?
No. The figures are nominal. To think in today's money, subtract your expected inflation rate from the interest rate before entering it.

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