Compound Interest Calculator
Compound interest is interest earned on both the original principal and the interest already added to it. Enter an amount, rate and time to see the future value and a year-by-year breakdown.
Enter your figures below. Results update as you type.
Future value$34,581.90
- Your deposits 64%
- Interest earned 36%
- Total deposited
- $22,000.00
- Interest earned
- $12,581.90
| Year | Deposited | Interest | Balance |
|---|---|---|---|
| 1 | $11,200.00 | $650.33 | $11,850.33 |
| 2 | $12,400.00 | $1,414.79 | $13,814.79 |
| 3 | $13,600.00 | $2,300.42 | $15,900.42 |
| 4 | $14,800.00 | $3,314.67 | $18,114.67 |
| 5 | $16,000.00 | $4,465.50 | $20,465.50 |
| 6 | $17,200.00 | $5,761.33 | $22,961.33 |
| 7 | $18,400.00 | $7,211.09 | $25,611.09 |
| 8 | $19,600.00 | $8,824.28 | $28,424.28 |
| 9 | $20,800.00 | $10,610.98 | $31,410.98 |
| 10 | $22,000.00 | $12,581.90 | $34,581.90 |
- Balance
- Your deposits
How the Compound Interest calculation works
A = P x (1 + r / n)^(n x t)
P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the time in years. $10,000 at 6% compounded monthly grows to $18,194 in ten years with no further deposits.
Adding $100 a month to that example lifts the ten-year balance to about $34,582, of which $12,582 is interest.
Why compound interest grows faster over time
With compound interest, each period's interest is added to the balance and then earns interest itself. Growth is slow at first and accelerates, because the amount earning interest keeps getting larger. That is why time matters more than almost any other input.
Here is $10,000 left alone at 6% a year, compounded monthly, with nothing added:
| After | Balance | Interest earned |
|---|---|---|
| 10 years | $18,194 | $8,194 |
| 20 years | $33,102 | $23,102 |
| 30 years | $60,226 | $50,226 |
| 40 years | $109,575 | $99,575 |
The fourth decade alone adds about as much as the first three combined.
How much the rate matters
The same $10,000 over 20 years at different rates, compounded monthly:
| Annual rate | Balance after 20 years |
|---|---|
| 2% | $14,913 |
| 4% | $22,226 |
| 6% | $33,102 |
| 8% | $49,268 |
| 10% | $73,281 |
Doubling the rate from 4% to 8% does far more than double the gain: interest earned rises from $12,226 to $39,268.
Regular contributions and starting early
Adding money regularly gives compounding more to work with. Saving $300 a month at 7%:
| Saving for | You deposit | Balance |
|---|---|---|
| 20 years | $72,000 | $156,278 |
| 30 years | $108,000 | $365,991 |
| 40 years | $144,000 | $787,444 |
Someone who starts ten years earlier deposits $36,000 more and ends up with over $420,000 more. Project your own plan with the savings calculator or the retirement calculator.
The rule of 72
To estimate how long money takes to double, divide 72 by the annual rate. At 6% that gives 12 years; the exact figure with monthly compounding is 11.6 years. At 8% the rule gives 9 years against an exact 8.7. It is accurate enough for mental arithmetic at ordinary rates.
Compounding frequency
Interest can be added yearly, quarterly, monthly or daily. More frequent compounding earns more, but the effect is small: $10,000 at 6% for ten years becomes $17,908 compounded annually and $18,220 compounded daily. The rate and the time matter far more. To compare accounts that compound on different schedules, convert each to APY with the APY calculator.
When compounding works against you
The same arithmetic applies to debt. Credit card interest compounds on any balance you carry, typically daily, which is why a balance left unpaid grows quickly. See what it takes to clear one with the credit card payoff calculator.
Frequently asked questions
What is the rule of 72?
Divide 72 by the annual interest rate to estimate the years needed to double your money. At 6% that is about 12 years.
Does compounding frequency matter much?
Less than most people expect. At 6%, $10,000 becomes $17,908 after ten years compounded annually and $18,220 compounded daily, a difference of about 1.7%.
How is this different from simple interest?
Simple interest is charged on the principal only. See the simple interest calculator for a side-by-side figure.
How do I calculate compound interest?
Use 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 is added per year and t the number of years. $10,000 at 6% compounded monthly for 10 years grows to $18,194.
How do I calculate compound interest in Excel?
Use the FV function. =FV(0.06/12, 120, 0, -10000) returns $18,193.97: 6% a year compounded monthly on $10,000 for 120 months. Put a monthly deposit in the third argument, as a negative number, to include regular contributions.
How much will $10,000 be worth in 20 years?
At 6% a year compounded monthly, $10,000 grows to about $33,102 in 20 years with nothing added. At 8% it would be about $49,268.
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