Compound Interest Calculator

How it works

Compounding or regular saving?

Use this calculator to explore interest on earlier interest and compare compounding frequencies. For a monthly savings plan, use the Savings Calculator; for purchasing power after tax and inflation, use the Interest Calculator.

Understanding compounding and regular deposits

Compound interest applies growth to a balance that already includes earlier interest. Adding regular deposits introduces a separate source of growth, so compare contributed principal with the ending balance. Compounding frequency and deposit frequency describe different events and should not be confused. Use equivalent-rate modes when comparing quoted rates with different conventions, and keep the same time horizon for a fair comparison.

With 1,000 initially, deposits of 100 at each month end, and a 12% nominal annual rate compounded monthly, the balance after 12 months is 2,395.08. Deposits total 2,200 and interest is 195.08. This example assumes no tax, fees or inflation adjustment.

Guides

• Compounding, contributions, and the time between them

  Learn how rates, contribution timing, inflation, and taxes change a savings projection.

Savings growth: formula and assumptions

Each period: balance grows at the equivalent periodic rate, then a contribution is added (or added first for beginning-of-period deposits).

Returns and inflation are assumptions held constant. Annual taxes on positive interest are deducted at year end.

Equivalent interest rate: formula and assumptions

Effective annual rate = (1+j/m)^m−1. Equivalent nominal rate = m₂[(1+EAR)^(1/m₂)−1].

Equivalent rates produce the same annual growth despite different compounding schedules.

Monthly + annual contributions: formula and assumptions

Ending balance = opening growth + each contribution grown from its event time − modeled interest tax.

The annual stream is additional to twelve monthly contributions. Increases apply separately to each stream. Tax settles at year ends and the final partial year; inflation adjusts purchasing power.

Equivalent nominal rates: formula and assumptions

Equivalent nominal rate = target frequency × [exp(annual log-growth / target frequency) − 1].

Semimonthly means 24 periods and biweekly 26. Continuous compounding uses the logarithm of effective annual growth. This compares rates with equal annual growth.

Worked example

Reference example currency: USD. These fixed examples do not change with your calculator preferences.

Using the Savings growth example:

Starting amount ($)

10000

Regular contribution ($)

200

Contribution frequency

Monthly

Nominal annual return (%)

7

Time horizon (years)

10

Compounding per year

Monthly

Contribution timing

End of each period

Tax rate on annual interest (%)

0

Annual inflation assumption (%)

0

Each period: balance grows at the equivalent periodic rate, then a contribution is added (or added first for beginning-of-period deposits).

Example result

These are illustrative inputs. Change the values to explore a different scenario.

Formula references

• Investor.gov: compound interest (opens in a new tab)
• OpenStax annuities (opens in a new tab)

References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.

Common questions