About the Compound Interest Calculator
This shows how a lump sum grows when interest is earned on both the principal and the interest already accumulated — the effect that makes long-term saving and investing so powerful. Enter your starting amount, the annual rate, how long, and how often interest compounds, to see the final balance and how much of it is interest. It's a great way to picture the impact of time and rate on savings, fixed deposits or investments.
How it works — the formula
It uses the standard compound-interest formula:
A = P × (1 + r⁄n)ⁿᵗ
where P is the principal, r the annual rate (as a decimal), n the number of times interest compounds per year, and t the time in years. The total interest is A − P. For example, $10,000 at 6% compounded monthly for 10 years grows to about $18,194 — roughly $8,194 of interest, notably more than the $6,000 that simple interest would give, because each period's interest earns interest too.
Assumptions and behaviour
- Compounding frequency is selectable (annually, semi-annually, quarterly, monthly, daily) — more frequent compounding grows slightly faster at the same rate.
- The rate is a fixed annual rate applied for the whole term.
- It models a single lump sum with no further deposits or withdrawals.
- Amounts show two decimal places, in any currency.
Limitations
- No regular contributions. This grows a one-time lump sum; it doesn't model monthly deposits (for a savings-with-contributions plan, use the Savings Goal Calculator).
- It assumes a constant rate — real investment returns vary year to year, and this doesn't account for market ups and downs.
- It shows gross growth: taxes on interest/gains, fees, and inflation would reduce the real result.
- Nominal vs effective: at the same nominal rate, more frequent compounding yields a slightly higher effective return, which the frequency setting reflects.
Privacy
The calculation runs entirely in your browser. Nothing is uploaded or stored.
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