Compound Interest Calculator
Calculate final balance, total contributions, and interest earned with optional recurring deposits.
Inputs
Recurring Deposits
Results
Use this Compound Interest Calculator to estimate how an initial balance and optional recurring deposits may grow over time through compounding. It calculates final balance, total contributions, interest earned, and effective annual rate.
Important: The calculator assumes a fixed interest rate and regular deposits. Actual savings or investment results can differ because rates, returns, fees, taxes, and contributions may change over time.
Compound Interest Formula
Without recurring deposits, compound growth is calculated as:
Final balance = P × (1 + r ÷ n)n × t
Where:
- P = initial balance
- r = annual interest rate as a decimal
- n = number of compounding periods per year
- t = time in years
The interest earned is:
Interest earned = final balance − total contributions
Total contributions include the initial balance plus any recurring deposits you add.
Effective Annual Rate
The calculator also shows the effective annual rate, which reflects the effect of compounding:
Effective annual rate = [(1 + r ÷ n)n − 1] × 100
For the same nominal annual rate, more frequent compounding generally produces a slightly higher effective annual rate.
Recurring Deposits
You can include fixed recurring deposits made yearly, monthly, biweekly, or weekly.
Each deposit begins earning compound growth after it is added. Deposits made at the beginning of a period generally produce a slightly higher final balance than deposits made at the end of the period because the money has more time to grow.
Worked Example
Suppose you start with $5,000, earn an annual interest rate of 6%, compound monthly, and leave the money invested for 3 years with no additional deposits.
Final balance = $5,000 × (1 + 0.06 ÷ 12)36
Final balance ≈ $5,983.40
Interest earned:
$5,983.40 − $5,000 = $983.40
The effective annual rate is:
[(1 + 0.06 ÷ 12)12 − 1] × 100 ≈ 6.17%
Under these fixed assumptions, the original $5,000 grows by approximately $983.40 over three years.
Important Notes
- The calculator assumes the entered annual interest rate remains constant throughout the selected period.
- Recurring deposits are assumed to remain the same amount and occur consistently at the selected frequency.
- Beginning-of-period deposits have more time to compound than equivalent end-of-period deposits.
- Fees and expenses can reduce the amount available to earn interest or investment returns.
- Taxes, inflation, withdrawals, early-withdrawal penalties, changing rates, and account minimums are not included.
- For investments, an entered rate is only an assumed growth rate. Actual investment returns can fluctuate and may be negative.
- For savings products, compare the result with the financial institution’s stated interest rate, APY, compounding method, fees, and account terms.