Compound Interest Calculator

Use this calculator to easily calculate the compound interest and total deposit future value based on an initial principal. Allows adding money into the deposit, as well as calculating daily, monthly, quarterly, semiannual, and annual interest compounding, corresponding to compounding once per day, month, quarter, 6-months and 12-months (once per year).

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Using the compound interest calculator

Compound interest is a type of interest in which the interest amount is periodically added to the principal amound, and new interest is subsequently accrued over interest from past periods. It is a very powerful tool for increasing your capital and is a basic calculation related to personal savings plan or strategy, as well as long term growth of a stock portfolio.

Our compound interest calculator is a versatile tool which will help you:

  • calculate the final amount of money you will be able to save
  • calculate how compounding increases your savings over time
  • understand the difference between starting to save now or later

Start by entering your initial deposit or investment, or your current balance if you already have a deposit. This is used as a basis for all calculations. Then enter how long you want to keep the deposit or investment, usually in years, but we also support other time periods.

Enter the annual interest rate: this is usually listed as Annual Percentage Yield (APY) on offers and on bank product comparison sites and is a is a normalized representation based on a compounding period of one year. This is different than the Effective Annual Interest Rate which our calculator will calculate for you, as it depends on the compounding period. Both the EAI and APY do not account for fees and other expenses in servicing the deposit or investment). The APY is sometimes mistaken with the Annual Percentage Rate (APR), which, however, refers to the rate paid to a financial institution by a borrower and is therefore appropriate to products involving debt.

Continue by specifying the compounding period - you may need to consult your bank on this detail, but it is often disclosed on offers and deposit descriptions. Finally, if you plan on making regular contributions: adding to the deposit on a regular basis (monthly, yearly, etc.), enter the amount and the period on which you will make it, as well as whether you will make it in the beginning or the end of the period.

Our interest calculator will output: the value of your deposit or investment at the end of the period, the interest accrued, the effective interest rate, the total amount of additional deposits made and the percentage capital growth.

Compound interest formula

The compound interest formula is:

compound interest

where A is the Accrued amount (principal plus interest), P is the principal, r is the Annual nominal interest rate in decimal, t is the time in years, and n is the number of compounding periods per unit t.

The formula for the effective interest rate is:

effective interest rate

where I is the effective interest rate and the rest of the notation is as above. These formulas can be spun accordingly to solve for principal and time.

Effect of the compounding period

The compounding frequency, which is the time period at which interest is added to the principal, can have a slight positive effect on the effective interest rate versus the nominal annual interest rate. Using shorter compounding periods in our compound interest calculator will easily show you how big that effect is. You get the best effective rate when you have daily compounding (also called continuous compounding) and slightly worse with monthly or yearly compounding.

Financial caution

This is a simple online compound interest calculator which is a good starting point in estimating the return on investment and capital growth you can expect from a bank deposit or a similar investment, by is by no means the end of such a process. You should always consult a qualified professional when making important financial decisions and long-term agreements, such as long-term bank deposits. Use the information provided by the calculator critically and at your own risk.

Cite this calculator & page

If you'd like to cite this online calculator resource and information as provided on the page, you can use the following citation:
Georgiev G.Z., "Compound Interest Calculator", [online] Available at: https://www.gigacalculator.com/calculators/compound-interest-calculator.php URL [Accessed Date: 18 Jul, 2018].