Compound Interest Calculator

What Is Compound Interest?

Compound interest is interest earned on both your original money and the interest already added to it. Over long periods it makes savings grow much faster than simple interest. This calculator shows how a starting amount, plus optional monthly additions, grows with yearly, half-yearly, quarterly, monthly or daily compounding.

How to Use It

1. Enter the starting amount and the yearly interest rate.
2. Enter the number of years and how often interest is compounded.
3. Optionally enter an amount you will add every month.
4. Choose your currency - the calculator works for any country.

Example

Starting with $10,000, adding $200 a month for 10 years at 5% compounded monthly gives about $47,527. You put in $34,000 in total, so $13,527 is interest. Monthly compounding at 5% equals an effective annual rate of 5.116%.

The Formula

For a single amount: A = P × (1 + r ÷ n)^{n × t}, where P is the principal, r the yearly rate, n the compounding periods per year and t the years. Regular additions are added month by month, each growing from the month it is deposited.

Why Compounding Frequency Matters

The more often interest is compounded, the faster money grows - but the effect is small compared with the rate and the time. Use the effective annual rate (also called APY or AER) to compare accounts: it shows what a nominal rate is really worth after compounding.

Limitations

The calculator assumes a fixed rate and no taxes or fees. Real investments with variable returns will differ. For Indian mutual fund SIPs, use the SIP Calculator; for bank deposits, the FD Calculator; to compare with simple interest, the Simple Interest Calculator.