Compound Interest Calculator
See how savings grow when interest earns interest. Set your deposit, rate and compounding frequency; we show the balance, APY and every year’s interest.
APY 4.594%, interest earned $11,910.
Year-by-year table
| Year | Added | Growth that year | Total contributed | Balance |
|---|---|---|---|---|
| 1 | $2,400 | $510 | $12,400 | $12,910 |
| 2 | $2,400 | $643 | $14,800 | $15,953 |
| 3 | $2,400 | $783 | $17,200 | $19,136 |
| 4 | $2,400 | $929 | $19,600 | $22,465 |
| 5 | $2,400 | $1,082 | $22,000 | $25,947 |
| 6 | $2,400 | $1,242 | $24,400 | $29,589 |
| 7 | $2,400 | $1,409 | $26,800 | $33,399 |
| 8 | $2,400 | $1,584 | $29,200 | $37,383 |
| 9 | $2,400 | $1,767 | $31,600 | $41,551 |
| 10 | $2,400 | $1,959 | $34,000 | $45,910 |
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Get a plain-English read of the result above: what drives it, what to try changing. It sends only the numbers in this calculator and your question. Educational only, not financial advice.
Compounding more often: a small edge that runs out
$10,000 for 10 years. Each step from annual to daily compounding adds a little, but the gains shrink fast and top out at “continuous” compounding (the mathematical limit, ert). If a bank advertises daily compounding as a big deal, this is why it isn’t.
| Compounding | After 10 years | vs annual |
|---|---|---|
| annually | $17,908.48 | +$0.00 |
| semiannually | $18,061.11 | +$152.64 |
| quarterly | $18,140.18 | +$231.71 |
| monthly | $18,193.97 | +$285.49 |
| daily | $18,220.29 | +$311.81 |
| continuous | $18,221.19 | +$312.71 |
How compound interest works
With simple interest you earn a fixed amount on the original deposit every year. With compound interest each period’s interest is added to the balance, so the next period earns interest on a larger number. $10,000 at 5% simple interest becomes $15,000 in 10 years; compounded annually it becomes $16,289, and after 30 years the gap is $25,000 versus $43,219.
The formula for a lump sum is A = P(1 + r/n)nt. Regular deposits each compound for however long they sit in the account, which this calculator handles month by month.
Where you’ll meet it
- High-yield savings and CDs: advertised as APY, usually compounded daily or monthly.
- Investments: reinvested dividends and gains compound the same way. Use the investment calculator for stock-market projections or the dividend calculator for DRIP.
- Debt: credit cards compound against you, often at 20%+ APR.
For a quick doubling estimate, the Rule of 72 divides 72 by the rate.
Questions people ask
What is the compound interest formula?
For a lump sum: A = P × (1 + r/n)^(n×t), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the years. Regular deposits add the future value of an annuity on top. This calculator applies both month by month.
How much does compounding frequency matter?
Less than people think. At 5%, $10,000 for 10 years grows to $16,289 compounded annually, $16,436 quarterly, $16,470 monthly and $16,487 daily. The rate and the time matter far more than the frequency.
What is APY versus APR?
APR (or nominal rate) is the stated yearly rate before compounding. APY (annual percentage yield) includes compounding: 5% APR compounded monthly is 5.12% APY. Savings accounts in the US must advertise APY under the Truth in Savings Act.
Is compound interest the same as investment returns?
Mathematically it is treated the same way here, but a savings account’s interest is steady while stock returns vary year to year. For investments, use the average return you expect and remember the path will be bumpy.