Compound Interest Calculator
The Compound Interest Calculator shows how a single lump-sum investment grows over time based on your interest rate, compounding frequency, and time horizon. Compounding frequency changes the effective annual yield even though the stated rate stays the same: the calculator divides your annual rate by the number of periods you choose (12 for monthly, 365 for daily), so a 5% rate compounded daily produces a slightly higher final balance than the same 5% compounded annually, since interest starts earning interest sooner. The formula applies one constant rate across the entire horizon, so it can't model a rate that changes partway through, such as a promotional CD rate that steps down after an introductory period. It also uses discrete compounding at your chosen frequency rather than continuous compounding — the mathematical limit as compounding frequency approaches infinity — so results come out marginally below a continuously-compounded formula at the same stated rate.
How This Tool Works
Enter your starting principal, annual interest rate, compounding frequency, and time horizon to see the future value and interest earned.
Formula & Method
Future value = P × (1 + r/n)^(n×t), where P is principal, r is the annual interest rate, n is compounding periods per year, and t is years.
Example Calculation
A $10,000 principal at 5% annual interest, compounded monthly, over 15 years. Step 1: divide the annual rate by the compounding periods per year — 5% ÷ 12 = 0.416667% per period (0.00416667 as a decimal). Step 2: find the total number of periods — 12 periods/year × 15 years = 180 periods. Step 3: apply the compound interest formula — FV = 10,000 × (1.00416667)^180 = 10,000 × 2.113704 = $21,137.04. Step 4: subtract the principal for interest earned — $21,137.04 − $10,000 = $11,137.04.
Frequently Asked Questions
Does compounding frequency matter much?+
It has a modest effect — more frequent compounding (daily vs. annually) yields slightly more growth for the same stated rate, though the difference shrinks at lower rates.
What's the difference between this and the Savings Calculator?+
This tool models a single lump-sum investment with no further contributions. Use the Savings Calculator if you're also adding money regularly.
Is this the same as APY?+
Annual Percentage Yield (APY) already factors in compounding frequency, while this calculator lets you see the effect of different compounding schedules on a stated annual rate.
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<a href="https://everyfix.net/tools/compound-interest-calculator/">Compound Interest Calculator</a> by <a href="https://everyfix.net">EveryFix</a>Related Tools
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