Compound Interest Calculator
See what your savings grow into once interest starts earning interest, with regular contributions and any compounding frequency.
Your details
Advanced options
Depositing on payday rather than at period end earns one extra period of interest.
Result
Final balance
- Total you put in
- $130,000
- Interest earned
- $170,851
- Growth multiple
- 2.31
- Effective annual rate
- 7.23%
- From year 17 onward, the interest you have earned exceeds everything you contributed. That crossover is compounding doing the work for you.
Year-by-year balance
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| 0 | $10,000 | $0.00 | $10,000 |
| 1 | $16,000 | $919 | $16,919 |
| 2 | $22,000 | $2,339 | $24,339 |
| 3 | $28,000 | $4,294 | $32,294 |
| 4 | $34,000 | $6,825 | $40,825 |
| 5 | $40,000 | $9,973 | $49,973 |
| 6 | $46,000 | $13,782 | $59,782 |
| 7 | $52,000 | $18,299 | $70,299 |
| 8 | $58,000 | $23,578 | $81,578 |
| 9 | $64,000 | $29,671 | $93,671 |
The formula
A = P(1 + r/n)^(nt) + PMT · [ ((1 + i)^m − 1) / i ]- A
- Final balance
- P
- Starting principal
- r
- Nominal annual interest rate
- n
- Compounding periods per year
- t
- Years
- PMT
- Contribution per period
- i
- Effective rate per contribution period
- m
- Total contribution periods
The first term grows the starting principal. The second is the future value of an annuity — the accumulated value of a stream of equal contributions. Because contributions and compounding can happen on different schedules (you might save monthly while the bank compounds daily), the contribution rate i is derived from the effective annual rate rather than by naively dividing the nominal rate, which would otherwise understate the result.
Frequently asked questions
How often should interest compound for the best result?
More frequently is better, but the gains flatten quickly. Going from annual to monthly compounding is a real improvement; going from daily to continuous is almost invisible. At 7% over 20 years on $10,000, annual compounding yields about $38,700 and daily about $40,500 — meaningful, but far smaller than the effect of the rate itself or the time invested.
What is the difference between nominal and effective annual rate?
The nominal rate is the headline figure before compounding is accounted for. The effective annual rate is what you actually earn once compounding within the year is included. A nominal 7% compounded monthly gives an effective 7.23%. When comparing accounts, compare effective rates — in many countries banks are required to quote this as the AER or APY.
Does this account for inflation or tax?
No. These are nominal figures before both. As a rough adjustment, subtract your expected inflation rate from the interest rate to see growth in today's purchasing power — at 7% growth and 3% inflation, enter 4% for a real-terms result. Tax depends entirely on your jurisdiction and account type.
Why does contributing at the start of the period help?
Each contribution earns interest for one extra period. Over a long horizon with frequent contributions this compounds into a visible difference — typically under 1% of the final balance, but free. It is why paying into savings on payday beats paying in at month end.
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