Compound interest calculator

Compound interest is interest that earns interest. Each time it is added to your balance, the next round is figured on a bigger number. Enter your deposit, what you add each month, the rate and how often it compounds to see what it grows to.

For savings accounts, CDs and bonds with a fixed rate · Free, no sign-up · The formula

Use your account's rate. For reference, 3-month Treasury bills averaged 3.4% a year from 1928 to 2025.

Compounds

After 10 years at the 3.40% you entered, compounded monthly, you could have

$42,580

You put in $34,000. Interest added $8,580.

3.45%APY, the rate after compounding
20.4 yearsTo double a single deposit
21.2 yearsRule of 72 guess
Today5 years10 years
Your balanceWhat you put in
Save my plan

Hypothetical illustration based on your inputs. Not a prediction, a recommendation, or the performance of any Amaltash strategy.

How it works: your balance grows at the fixed rate you enter, compounded as often as you choose. Monthly additions go in at the end of each month. Real rates change over time.

Results change each time you change an input, and as new market data is added.

Real investing is different. Fees, taxes and trading costs are not included. Past market returns do not predict future returns, and you can lose money.

See every year
YearDepositsInterest that yearTotal interestBalance
1$2,400$383$383$12,783
2$2,400$479$862$15,662
3$2,400$579$1,441$18,641
4$2,400$682$2,122$21,722
5$2,400$788$2,910$24,910
6$2,400$898$3,808$28,208
7$2,400$1,012$4,820$31,620
8$2,400$1,130$5,950$35,150
9$2,400$1,252$7,202$38,802
10$2,400$1,378$8,580$42,580

What is compound interest?

With compound interest, the interest you earn is added to your balance. Next time, you earn interest on that bigger balance. So you earn a little more each year, even when the rate stays the same. Here is $1,000 at 5% a year, compounded yearly:

YearInterest that yearBalance at year end
1$50.00$1,050.00
2$52.50$1,102.50
3$55.13$1,157.63

Open "See every year" under the calculator for the same table with your own numbers.

Simple vs compound interest

Simple interest is paid only on the money you put in. Compound interest is also paid on the interest you have already earned. The gap starts small and grows each year. Here is $1,000 at 5% a year:

AfterSimple interestCompound interest
1 year$1,050.00$1,050.00
3 years$1,150.00$1,157.63
10 years$1,500.00$1,628.89

How to work out compound interest by hand

  1. Write the rate as a decimal: 5% is 0.05.
  2. Divide it by how many times a year it compounds. Monthly is 0.05 ÷ 12.
  3. Add 1, then raise that to the total number of times it compounds. Monthly for 10 years is 120 times.
  4. Multiply by your deposit. That is your ending balance. Take away the deposit to see the interest.

For $1,000 at 5%, compounded monthly for 10 years, that comes to $1,647.01, so $647.01 of interest. The formula, with monthly additions, is below.

Daily, monthly or continuous compounding

The more often interest compounds, the more you earn, but each step adds less. Continuous compounding is the limit: interest added every instant. Its formula is A = P × e^(r × t), where e is about 2.718.

$10,000 at 5% for 10 years grows to $16,486.65 compounded daily, and $16,487.21 compounded continuously. That is 56 cents more.

The rule of 72

To guess how many years it takes money to double, divide 72 by the yearly rate. At 6%, 72 ÷ 6 = 12 years. It is a quick estimate, and it only works for a fixed rate.

Yearly rateRule of 72Exact, compounded yearly
2%36 years35.0 years
4%18 years17.7 years
6%12 years11.9 years
8%9 years9.0 years

APR vs APY

APR, the annual percentage rate, is the yearly cost of borrowing. Loans and credit cards use it, and it leaves out compounding. APY, the annual percentage yield, is what savings earn in a year with compounding counted.

So the same rate means more once it compounds. A card with a 24% APR that compounds daily costs about 27% a year on a balance you carry.

Compound interest on debt

On debt, compounding works against you. Most credit cards figure interest daily and add it to what you owe, so tomorrow's interest is charged on today's interest too. If you pay the full balance by the due date each month, most cards charge no interest on purchases.

Future value

Future value is what money grows to at a set rate after a set time. That is what this calculator shows. The ending balance is the future value of your deposit plus your monthly additions.

CAGR: compound annual growth rate

CAGR works backward. It takes a starting value and an ending value, and finds the steady yearly rate that links them: (end ÷ start)^(1 ÷ years) − 1. If $1,000 became $2,000 in 10 years, the CAGR is about 7.2% a year.

Real investments rarely grow at a steady rate. CAGR smooths out the ups and downs, so it hides how bumpy the ride was.

The formula

Without monthly additions: A = P × (1 + r/n)n×t. P is your deposit, r the yearly rate, n how many times a year it compounds, t the years.

With monthly additions, we add each deposit at the end of the month and let it compound from then on.

APY is the rate after a year of compounding: (1 + r/n)n − 1. Banks must show it, so compare accounts by APY.

The rule of 72. 72 divided by the rate is roughly how many years it takes to double.

Questions people ask

Does daily compounding make a big difference?

Less than people think. $10,000 at 5% for 10 years grows to $16,289 compounded yearly, and $16,487 compounded daily. The rate matters far more than how often it compounds.

Is the stock market compound interest?

Not exactly. Stocks don't pay a fixed rate. They can grow faster, and they can fall. For that, use the investment calculator, which tests your plan on real history.

What rate should I use?

Use the rate or APY your bank or bond shows. Rates change; a savings rate today may not last.

Does this include taxes?

No. Interest is usually taxed, which lowers what you keep. Fees are not included either.

How long will it take to double my money?

Divide 72 by your yearly rate. At 4%, that is about 18 years. The rule of 72 above shows more rates.

Is compound interest good or bad?

It helps you when you save and costs you when you borrow. The longer it runs, the bigger the effect either way.

More calculators

CD calculatorSee the interest a CD adds up to at a fixed rate.High-yield savings calculatorSee how savings and interest add up each month.Investment calculatorPick an amount, a time and a real past average rate. See how it could add up.

See this with your real accounts

Connect your accounts and we keep the numbers up to date for you.

Connect accounts

Reviewed by Tavish Sharma, CFA · Last reviewed

Published by Amaltash Advisors LLC, an SEC-registered investment adviser

Sources

Get started