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Simple Interest Calculator
Calculate simple interest and the total amount for any principal, rate and period.
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Compound Interest Calculator
Enter a starting amount, a rate, a time and an optional monthly contribution. Choose how often interest compounds and read the balance at the end of every year.
- Monthly contributions
- Year-by-year table
- Four compounding options
Compound interest
Interest is added to the balance and then earns interest itself. Add a monthly contribution to see the full effect.
Compounded
| Year | Paid in | Interest | Balance |
|---|---|---|---|
| 1 | 6,200.00 | 341.95 | 6,541.95 |
| 2 | 7,400.00 | 778.99 | 8,178.99 |
| 3 | 8,600.00 | 1,317.01 | 9,917.01 |
| 4 | 9,800.00 | 1,962.23 | 11,762.23 |
| 5 | 11,000.00 | 2,721.25 | 13,721.25 |
| 6 | 12,200.00 | 3,601.11 | 15,801.11 |
| 7 | 13,400.00 | 4,609.24 | 18,009.24 |
| 8 | 14,600.00 | 5,753.57 | 20,353.57 |
| 9 | 15,800.00 | 7,042.49 | 22,842.49 |
| 10 | 17,000.00 | 8,484.92 | 25,484.92 |
Final balance
25,484.92
Total paid in17,000.00
Interest earned8,484.92
Growth on money paid in49.9%
Time does more than rate here. Starting ten years earlier usually beats a higher return that starts later.
Compound interest and why starting early matters
Compound interest means you earn interest on your interest. A balance that grows a little every year grows by a larger amount in the next, and the effect becomes dramatic over decades.
The formula
For a lump sum, A = P x (1 + r/n)^(n x t), where P is the starting amount, r the yearly rate as a decimal, n the number of times interest compounds each year and t the number of years. 5,000 at 6% compounded monthly for 10 years grows to about 9,097.
Regular contributions add to the balance each month and then earn interest from that point on. This calculator works month by month so deposits and compounding interact the way they do in a real account.
How much does time matter?
| Years | Total paid in | Balance | Interest earned |
|---|---|---|---|
| 10 | 12,000 | 16,388 | 4,388 |
| 20 | 24,000 | 46,204 | 22,204 |
| 30 | 36,000 | 100,452 | 64,452 |
| 40 | 48,000 | 199,149 | 151,149 |
In the last ten years of that forty-year run, the balance doubles. Most of the growth arrives late, which is why the advice to start early is about time and not about large amounts.
Using the calculator
- 1Enter your starting balance, or zero if you are starting from nothing.
- 2Add the amount you plan to contribute each month.
- 3Enter the yearly rate and the number of years.
- 4Choose how often interest compounds, then read the table to see each year.
Compounding frequency in practice
More frequent compounding gives a slightly higher return, but the difference is small compared with changes to rate, contribution or time. Moving from yearly to monthly compounding at 6% adds about 0.17 percentage points a year; moving from monthly to daily adds almost nothing.
Related calculators
Compare with flat-rate growth in the Simple Interest Calculator. The same maths works against you in debt, so see the Loan Calculator and the EMI Calculator.
Frequently asked questions
What is the compound interest formula?
A = P x (1 + r/n)^(n x t). P is the starting amount, r the annual rate as a decimal, n the compounding periods per year and t the years.
Is daily compounding much better than monthly?
No. The difference is tiny. Rate, time and how much you contribute matter far more than how often interest compounds.
How do I calculate compound interest with monthly contributions?
Each period, add interest on the current balance, then add the contribution. Repeated over the term, this grows faster than simple interest because earlier interest earns interest too. Enter a starting balance, monthly deposit, rate and years to see the final balance and a yearly table.
How do I work out how long it takes money to double?
A quick estimate is the rule of 72: divide 72 by the annual rate. At 6% it takes about 12 years. For a precise answer, try different terms in the calculator until the balance reaches twice the starting amount.
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