Compound interest calculator
Find out what a sum of money grows to with compound or simple interest, with optional regular deposits. The working and a year-by-year table are shown under the answer. Amounts have no currency symbol, so use any currency.
Worked example
With the values shown above when the page opens:
Balance after 10 years: 20,096.61
- Rate per period i = 7% ÷ 12 = 0.583333%, number of periods n = 10 × 12 = 120
- Balance = P × (1 + i)^n
- = 10,000.00 × 2.009661 = 20,096.61
How it works
- Simple interest is earned only on the starting amount: interest = P × r × t.
- Compound interest is earned on the starting amount and on interest already added, so growth speeds up: balance = P × (1 + r/m)^(m × t) for m compounding periods a year.
- With regular deposits, each deposit also earns interest from the period after it is paid in.
- More frequent compounding gives slightly more, but the effect is small compared with the rate and the time.
Questions
What is the difference between simple and compound interest?
Simple interest never earns interest on interest. Compound interest does. Over 10 years at 7%, 10,000 grows to 17,000 with simple interest and to about 20,097 with yearly compounding.
Does this include tax or fees?
No. It is a plain calculation. Real accounts may have fees, tax and rates that change, so treat the result as an estimate.
What does compounded monthly mean?
Interest is added to the balance 12 times a year at one twelfth of the yearly rate, and the next month earns interest on the larger balance.
Related
Calculators are for learning and quick checks. Check important figures yourself, and do not rely on them for tax, legal or financial decisions.