Balance over time
Year by year
The formula
How it works
See how much interest a lump sum earns with compound interest. Enter your principal, the interest rate, the number of years and how often interest compounds to get the final balance and the interest earned.
FAQ
How does compounding frequency change the result?
The more often interest compounds, the more you earn, because each compounding adds interest that itself starts earning. Daily compounding beats annual, though at ordinary rates the difference is modest — a few tenths of a percent of the balance over a year.
What is the effective annual rate?
It is the rate you actually earn once compounding is taken into account. A 5% rate compounded monthly gives an effective rate slightly above 5%, because interest earns interest during the year. The calculator shows it so you can compare accounts fairly.
What is the difference between simple and compound interest?
Simple interest only ever applies to the original principal, so it grows in a straight line. Compound interest applies to the principal plus any interest already earned, so the balance grows faster the longer it runs.
Does a larger principal earn interest at a different rate?
No — the rate and compounding frequency stay the same regardless of principal. A larger starting amount simply produces proportionally more interest in dollar terms, not a better rate.
How many years can I project?
The calculator supports up to 60 years, which comfortably covers most savings and retirement horizons. Entering a term longer than that gets capped at 60 years.
Is the interest shown before or after tax?
The result is gross interest, before any tax on interest income. Depending on where you live and the type of account, some or all of that interest may be taxable, which would lower your actual take-home return.
Why does daily compounding barely beat monthly compounding?
Each extra compounding period only adds interest on the interest accrued since the last period, which is a tiny amount at typical rates. The gap between daily and monthly compounding only becomes meaningful at very high rates or over very long periods.
About the interest calculator
This calculator works out how a single deposit grows under compound interest. You give it a principal, an interest rate, a term in years and a compounding frequency, and it returns the final balance and the interest earned on top of your money. Compound interest is the engine behind savings accounts, certificates of deposit and long-term investing, and seeing the numbers makes clear why time in the market matters so much.
How to use it
Enter the principal you are investing, the annual interest rate, the number of years, and how often interest compounds — from annually to daily. The calculator shows the final balance, the total interest, and the effective annual rate. For example, $10,000 at 5% compounded monthly for 10 years grows to about $16,470, of which roughly $6,470 is interest.
The formula
Compound growth is , where is the principal, the annual rate, the number of compounding periods per year and the years. Each period multiplies the balance by , so the balance grows geometrically rather than in a straight line. The interest earned is simply .
Where it is used
Savers use it to project the return on a deposit and to compare accounts that compound at different frequencies. Students meet compound interest as a core topic in finance and maths, and investors use the same formula to estimate how a lump sum grows over decades. Because it isolates the growth of a single amount, it is also the clearest way to see the pure effect of compounding.