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Compound Interest Calculator

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Deposits made at what point in month?
Increase deposits yearly with inflation?

Use our compound interest calculator to see how much your savings or investments might grow over time. You can include regular deposits or withdrawals as part of your calculation.


Disclaimer: Whilst every effort has been made in building these compound interest calculators, we are not to be held liable for any special, incidental, indirect or consequential damages or monetary losses of any kind arising out of or in connection with the use of them. Full disclaimer. These tools are here purely as a service to you, please use them at your own risk.

How to use the compound interest calculator

  1. Enter an initial deposit figure
  2. Enter a percentage interest rate - either yearly, monthly, weekly or daily
  3. Enter a number of years or months, or a combination of both, for the calculation
  4. Select your compounding interval
  5. Include any regular monthly, quarterly or yearly deposits or withdrawals

Our compound interest calculator will take all the information you've entered to give you a future balance and a projected breakdown of both monthly and yearly figures to show you how your savings or investment might change over time.

How to calculate compound interest

Compound interest, or 'interest on interest', is calculated using the compound interest formula. By using our calculator, you can work out an appropriate regular saving strategy to maximise your future wealth. Compound interest is the concept of adding accumulated interest back to the principal sum, so that interest is earned on top of interest from that moment on.

The formula used in the compound interest calculator is A = P(1+r/n)(nt)

  • A = the future value of the investment
  • P = the principal investment amount
  • r = the interest rate (decimal)
  • n = the number of times that interest is compounded per period
  • t = the number of periods the money is invested for

You can read more about the formula in this article.

Let's look at a simple example and say you have $10,000 in your savings account, earning 10% interest per year. Your first 5 years might look like this:

Compound interest example
Year Interest Calculation Interest Earned End Balance
Year 1 $10,000 x 10% $1,000 $11,000
Year 2 $11,000 x 10% $1,100 $12,100
Year 3 $12,100 x 10% $1,210 $13,310
Year 4 $13,310 x 10% $1,331 $14,641
Year 5 $14,641 x 10% $1,464.10 $16,105.10

Daily, monthly or yearly compounding

Our compound interest calculator includes options for:

  • daily compounding
  • monthly compounding
  • quarterly compounding
  • half yearly and yearly compounding
  • monthly, quarterly and yearly deposits and withdrawals
  • negative interest rates

Your savings account may vary on this, so you may wish to check with your bank or financial institution to find out which frequency they compound your interest at. Our compound interest calculator allows you to enter a negative interest rate, should you wish. If you need to work out the interest due on a loan, you can use the loan calculator.

When is interest compounded?

With savings accounts, interest can be compounded at either the start or the end of the compounding period (month or year). If additional contributions are included in your calculation, my savings calculators assume that those contributions are made at the start of each period.

What is the effective annual rate?

The effective annual rate is the rate of interest that you actually receive on your savings after inclusion of compounding. When compounding of interest takes place, the effective annual rate becomes higher than the overall interest rate. The more times the interest is compounded within the year, the higher the effective annual rate will be.


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Compounding example

Here's an example chart. You invest your profit margin from a sale of an item ($1,000). We'll use a longer compounding investment period (20 years) at the same 10% per year, to keep the sum simple. Here we compare the benefits of compound interest versus standard interest and no interest at all.

Diagram of compound interest

When you get into a pattern of regular, consistent investing. the power of compound interest can prove an effective growth strategy for your money, as the deposits mount up and you gain interest on your interest. Find out more in our article, What is compound interest?