Use this calculator to easily work out what your savings or investment will be worth, with daily, monthly or annual compounding, yearly contribution increases, inflation and tax drag. Choose from 15 currencies, then set a target and the calculator tells you how long it takes or how much to save each month.
| Year | Deposits | Interest | Balance |
|---|
Tax drag lowers the rate by your tax percentage each year. Contributions are added monthly and grow at the equivalent monthly rate of your chosen compounding.
| Compounding | Final balance | Interest | Yield (APY) |
|---|
Tap a star to rate your result.
What is compound interest?
Compound interest is interest paid on your original balance and on the interest already added to it. Each period the balance grows, so the next period's interest is calculated on a larger number. Simple interest pays only on the original amount, which is why compounding pulls ahead as the years pass.
A compound interest calculator applies that rule period by period. You enter a starting amount, a rate, a time span and how often interest is added, and it returns the final balance and the interest earned.
Compound interest formula
With continuous compounding the formula becomes A = P x ert. The effective annual yield is (1 + r/n)n - 1, and it is the figure to compare when two accounts compound at different frequencies.
How to use this calculator
- Enter the amount you have now and the amount you will add each month.
- Type the annual rate and the number of years.
- Choose how often interest compounds and whether deposits land at the start or end of the month.
- Add inflation and tax if you want a result in today's money after tax drag.
- Read the future value, the split between deposits and interest, and the year-by-year table.
- Switch to Goal solver to find the time or monthly deposit that reaches a target.
Worked examples
The examples below use US dollars. The math is identical in any currency, so swap in your own amounts.
Example 1: $10,000 at 7% for 20 years, no deposits
| Compounding | Final balance | Interest |
|---|---|---|
| Annually | $38,697 | $28,697 |
| Quarterly | $40,064 | $30,064 |
| Monthly | $40,387 | $30,387 |
| Daily | $40,547 | $30,547 |
| Continuous | $40,552 | $30,552 |
Going from annual to daily compounding adds about $1,850. The jump from daily to continuous is only $5.
Example 2: $10,000 plus $300 a month at 7% for 20 years
Compounded monthly with deposits at month end, the balance reaches about $196,665. You deposit $82,000 in total, so $114,665 comes from interest. The $300 a month alone grows to about $156,277.
Rule of 72 in real numbers
Divide 72 by the annual rate for a quick doubling time. Exact figures for annual compounding:
| Rate | Rule of 72 | Exact |
|---|---|---|
| 4% | 18.0 years | 17.7 years |
| 6% | 12.0 years | 11.9 years |
| 8% | 9.0 years | 9.0 years |
| 10% | 7.2 years | 7.3 years |
| 12% | 6.0 years | 6.1 years |
Why inflation and tax change the answer
A balance of $196,665 in 20 years does not buy what $196,664 buys now. At 2.5% inflation it has the purchasing power of about $120,000 today. Interest in a taxable account is also reduced every year it is paid, so the tax field lowers the working rate instead of taking a lump sum at the end. Retirement accounts that defer or waive tax can be modeled by leaving tax at 0.
Compound interest calculator FAQs
How do I calculate compound interest by hand?
Convert the rate to a decimal, divide it by the number of periods per year, add 1, raise the result to the power of periods times years, then multiply by the starting amount.
What is the difference between compound and simple interest?
Simple interest pays only on the starting amount. Compound interest pays on the starting amount plus past interest, so growth speeds up over time.
Does daily compounding beat monthly compounding?
Yes, but by a small margin. On $10,000 at 7% for 20 years, daily compounding ends about $160 above monthly. Rate and time matter far more than frequency.
What is APY and how is it different from APR?
APR is the stated yearly rate. APY includes compounding within the year, so it is always equal to or higher than APR. Use APY to compare savings accounts.
Should deposits go in at the start or end of the month?
Start-of-month deposits earn one extra month of interest each, which adds a modest amount over long periods. Choose the option that matches when your money actually arrives.
Does the calculator work with currencies other than the US dollar?
Yes. Pick one of 15 currencies at the top and every result, chart label and table switches to that currency. Enter the rate your own bank or fund offers, since rates differ by country.
How long will it take to double my money?
Divide 72 by your annual rate for a close estimate. The Growth tab shows the exact doubling time for your inputs.
How do I find the monthly amount needed to reach a target?
Open the Goal solver tab, enter the target, starting amount, rate and years. It returns the monthly deposit that lands on the target and the time your current deposit would take.
Can the calculator show my balance in today's money?
Yes. Enter an inflation rate and the Growth tab shows the future value divided by the cumulative price increase over the period.
More free calculators
References
- U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy. Compound Interest Calculator, Investor.gov.
- U.S. Securities and Exchange Commission. Compound Interest, Investor.gov glossary.
- Federal Deposit Insurance Corporation. National Rates and Rate Caps.
- U.S. Bureau of Labor Statistics. Consumer Price Index, CPI Inflation Calculator.
- Internal Revenue Service. Publication 550, Investment Income and Expenses.