Compound Interest Calculator

Compound interest is often called "interest on interest." Each period, you earn interest on your current balance, which includes previous interest. Over time, this creates exponential growth. The formula A = P(1 + r/n)^(nt) captures this: A is the final amount, P is principal, r is the annual rate (as a decimal), n is how many times per year interest compounds, and t is time in years.

For example, $10,000 at 5% annual rate, compounded monthly for 10 years, grows to about $16,470. The same principal at simple interest would only reach $15,000. Compound interest accelerates growth.

Many savers add money regularly — a 401(k) contribution, a monthly transfer to savings, or a recurring investment. The calculator includes a monthly contribution field. Each contribution is added at the end of the month and compounds with the rest of the balance.

The future value of a series formula combines the lump-sum growth of your principal with the growth of your contributions. Even small monthly amounts can significantly increase your final balance over decades.

Banks and investments compound at different intervals. Savings accounts often compound daily. Bonds might compound annually. The more frequently interest compounds, the higher the effective return. Daily compounding at 5% gives an effective annual rate of about 5.13%.

This calculator lets you choose daily, monthly, quarterly, or annual compounding. The year-by-year table shows exactly how your balance grows so you can plan and compare scenarios.