Compound Interest Calculator
This calculator shows how a starting amount grows with compound interest over time, with an optional deposit every month. Enter the amount, the yearly rate and the term to see the final balance and the interest earned.
How to use it
Type your starting amount, the annual rate as a percentage and the number of years. Choose how often interest is compounded. If you also add money every month, enter that amount. The result shows the final balance, how much you contributed and how much came from interest.
How it is calculated
Without deposits the formula is A = P x (1 + r/n)^(n x t), where P is the starting amount, r the annual rate as a decimal, n the compounding periods per year and t the years. With monthly deposits the tool steps month by month. It converts the rate to an equivalent monthly rate, (1 + r/n)^(n/12) - 1, multiplies the balance by one plus that rate, then adds the deposit at the end of the month.
Results are rounded to two decimals only for display. Taxes, fees and changing rates are not included, and the term is rounded to whole months.
Examples
10,000 at 5% compounded monthly for 10 years gives 10,000 x (1 + 0.05/12)^120 = about 16,470.09, so interest is 6,470.09. With yearly compounding the same inputs give 16,288.95.
Starting at 0 with 200 deposited monthly at 6% for 5 years gives about 13,954 from 12,000 put in.
FAQ
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount. Compound interest is paid on the original amount plus interest already added, so growth accelerates over time.
Does more frequent compounding matter a lot?
Slightly. At 5%, monthly compounding over 10 years ends about 181 higher on 10,000 than yearly compounding. Rate and time matter far more.
Are deposits added at the start or end of the month?
At the end of each month in this tool, so each deposit begins earning from the following month.
Can I use it for debt?
The same math describes how an unpaid balance grows, but this tool does not model payments on a loan.
See also
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