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Compound Interest Calculator
A compound interest calculator shows how money grows when interest earns interest. $10,000 at 5% compounded monthly becomes $16,470.09 after 10 years. Add regular monthly contributions and the effect is far larger: $300 a month at 7% for 30 years grows to about $366,000 from $108,000 paid in.
How to use this savings growth calculator
- Enter what you start with. Type a lump sum, or leave it at zero if you are starting from scratch.
- Add a monthly amount. Enter what you plan to save or invest each month. It is added at the end of each month.
- Set the rate and years. Use the account’s AER/APY for savings, or a realistic average return for investments.
- Choose how often interest compounds. Most savings accounts compound daily or monthly; many bonds and CDs compound yearly or quarterly.
- Adjust for inflation. Add an inflation rate to see what the final balance would buy in today’s money.
How compound interest works
With simple interest you only earn on the money you put in. With compound interest, each period’s interest is added to the balance, so the next period’s interest is calculated on a bigger number. The growth curve starts slowly and then bends upwards.
Take $10,000 at 5%. Simple interest pays $500 every year, giving $15,000 after 10 years. Compounded monthly, the same money grows to $16,470.09: the extra $1,470 is interest earned on earlier interest.
The compound interest formula
For a single deposit the compound interest formula is:
A = P × (1 + r/n)n×t
- A is the final amount
- P is the starting principal
- r is the annual rate as a decimal (5% = 0.05)
- n is the number of times interest compounds per year
- t is the number of years
Worked example: P = $10,000, r = 0.05, n = 12, t = 10 gives A = 10,000 × (1.0041667)120 = $16,470.09.
Regular contributions add a second part, the future value of a series of payments: PMT × ((1 + i)m − 1) ÷ i, where i is the monthly growth rate and m the number of months. The calculator adds both parts month by month so it can also show the yearly table.
Daily vs monthly vs annual compounding
The more often interest compounds, the more you earn, but the gains shrink quickly. Here is $10,000 at 5% for 10 years:
| Compounding | Final balance | Effective annual rate |
|---|---|---|
| Annually | $16,288.95 | 5.00% |
| Quarterly | $16,436.19 | 5.09% |
| Monthly | $16,470.09 | 5.12% |
| Daily | $16,486.65 | 5.13% |
Moving from monthly to daily compounding adds only about $17 over ten years. When you compare savings accounts, look at the AER (UK) or APY (US), which already includes the compounding effect, and use the daily compound interest calculator setting only if the account quotes a nominal rate.
Why starting early matters more than saving more
Time is the strongest lever in compounding. Saving $300 a month at an average 7% return:
| Saving for | Total paid in | Final balance |
|---|---|---|
| 10 years | $36,000 | $51,925 |
| 20 years | $72,000 | $156,278 |
| 30 years | $108,000 | $365,991 |
Someone who saves $600 a month for 20 years pays in $144,000 and ends with about $312,556, which is less than the $365,991 reached by saving half as much for 10 years longer. The final decade does more work than the first two put together.
Using it as an investment calculator: realistic returns
Savings accounts pay a known rate, but investment returns vary from year to year and can be negative. A steady average is a planning assumption, not a promise. Keep three things in mind:
- Fees come straight off your return. A 1% annual fee turns a 7% return into roughly 6%.
- Inflation erodes what your money can buy. In the example above, $144,573 after 20 years is worth about $88,229 in today’s money at 2.5% inflation.
- Tax on interest, dividends and gains reduces growth unless you use a tax-advantaged account such as an ISA in the UK or a 401(k) or IRA in the US.
Run a cautious rate and an optimistic rate to see a realistic range rather than a single number.
Compound interest calculator FAQs
How much will $10,000 be worth in 10 years?
At 5% compounded monthly, $10,000 becomes $16,470.09 after 10 years. At 7% with $200 added every month for 20 years, it grows to about $144,573.
What is the difference between APY, AER and the interest rate?
The interest rate is the nominal yearly rate before compounding. APY (US) and AER (UK) show the rate after compounding for a full year, so a 5% rate compounded monthly has an APY of about 5.12%. Use APY/AER to compare accounts.
Are contributions added at the start or end of each month?
At the end of each month. Contributions made at the start of the month would earn slightly more because each payment has one extra month to grow.
Can I use this for a debt that compounds, like a credit card?
Yes, enter the balance as the starting amount, set the monthly contribution to zero and use the card’s rate to see how an unpaid balance would grow. To plan repayments, use the loan calculator instead.
How long does it take to double my money?
Divide 72 by the interest rate for a quick estimate. At 7% that is about 10.3 years; the exact figure with monthly compounding is 9.9 years, which the calculator shows under your result.
Sources and methodology
The balance is updated monthly. Compounding n times a year is converted to an equivalent monthly growth factor (1 + r/n)^(n/12), so results match the standard formula A = P(1 + r/n)^(nt) exactly for lump sums. Contributions are added at the end of each month. Inflation-adjusted values divide the final balance by (1 + inflation)^years. All example figures were produced by this calculator.
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