Compound Interest Calculator
Enter your starting amount, the yearly rate, the number of years and how many times a year interest is added.
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Formula
A = P × (1 + r ÷ m)^(m × t), and the interest earned is A − P.
Pis the starting amountris the yearly rate as a decimal (rate % ÷ 100)mis how many times a year interest is addedtis the time in years
Worked example
10,000 at 5% a year for 10 years, interest added monthly:
m = 12, so each month's rate is 0.05 ÷ 12 and there are 120 periodsA = 10,000 × (1 + 0.05 ÷ 12)^120 =16,470.09- Interest earned is 16,470.09 − 10,000 = 6,470.09
Frequently asked questions
What is the compound interest formula?
A = P × (1 + r ÷ m)^(m × t), where P is the starting amount, r the yearly rate as a decimal, m the number of times interest is added a year and t the years. 1,000 at 5% compounded yearly for 10 years is 1,000 × 1.05^10 = 1,628.89.
Does compounding more often help?
A little. 10,000 at 5% for 10 years gives 16,288.95 compounded yearly and 16,470.09 compounded monthly. The gain from daily compounding over monthly is small.
What values should I use for the compounding?
Use 1 for yearly, 2 for twice a year, 4 for quarterly, 12 for monthly and 365 for daily. Use the figure your bank or fund states.
Does this include regular deposits or tax?
No. It shows one starting amount growing at a fixed rate. Extra deposits, fees, tax and changing rates are not included.