Compound Interest Calculator
Enter a starting amount, a yearly interest rate and a term to see how compounding grows the balance.
Illustrative estimate, not financial advice.
- Final amount
- $20,097
- Interest earned
- $10,097
- Starting amount
- $10,000
- Effective annual rate
- 7.23%
$10,000 at 7% a year for 10 years, compounded 12 times a year, grows to about $20,097.
| Year | Balance | Interest so far |
|---|---|---|
| 1 | $10,723 | $723 |
| 2 | $11,498 | $1,498 |
| 3 | $12,329 | $2,329 |
| 4 | $13,221 | $3,221 |
| 5 | $14,176 | $4,176 |
| 6 | $15,201 | $5,201 |
| 7 | $16,300 | $6,300 |
| 8 | $17,478 | $7,478 |
| 9 | $18,742 | $8,742 |
| 10 | $20,097 | $10,097 |
Illustrative estimate, not financial advice.
Assumptions
- The rate stays the same for the whole term and is a nominal annual rate.
- No deposits or withdrawals after the start.
- No taxes, fees or inflation are deducted.
Illustrative estimate, not financial advice. Results are shown before tax and fees unless stated.
What the compound interest calculator does
Compound interest is interest earned on both the original amount and the interest already added. The more often it compounds, and the longer the term, the faster the balance grows.
How it is calculated
Final amount = P x (1 + r / k)^(k x t), where P is the starting amount, r is the annual rate as a decimal, k is the number of compounding periods a year and t is the number of years.
Worked example
$10,000 at 7% a year for 10 years, compounded 12 times a year, grows to about $20,097.
Questions and answers
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount. Compound interest is paid on the original amount plus earlier interest, so growth accelerates.
Does compounding more often matter?
A little. The same nominal rate compounded monthly ends slightly higher than compounded yearly. The effective annual rate below shows the difference.
What is the effective annual rate?
It is the single yearly rate that would give the same result as the chosen compounding. It is always at least as high as the nominal rate.
Can I use this for savings accounts?
For a rough idea, yes, if the rate is fixed. Real accounts change rates, may pay at set dates and may tax the interest.