Compound interest calculator with compounding frequency
Enter a starting amount, an annual rate, the number of years and how often interest compounds. $10,000 at 5% compounded monthly for 10 years grows to $16,470.09, of which $6,470.09 is interest.
Inputs used by this calculator
Compound Interest Calculator uses the fields below. The starting values reproduce the page example; replace them with values from the same units and time period before using the result.
| Input | Starting example | Accepted value | How it is used |
|---|---|---|---|
| Starting principal | 10,000 | 0 or greater | Supplies the starting principal quantity used by the published equation or result breakdown. |
| Annual rate (%) | 5 | 0 to 100 | Supplies the annual rate (%) quantity used by the published equation or result breakdown. |
| Years | 10 | 0 to 200 | Supplies the years quantity used by the published equation or result breakdown. |
| Compounds per year | Monthly | Annually · Quarterly · Monthly · Daily | Supplies the compounds per year quantity used by the published equation or result breakdown. |
What compound interest is
Compound interest is interest earned on both the original amount and the interest already added. Investor.gov describes it as the way money can grow faster over time than with simple interest, because the base keeps getting larger.
The formula
The balance after t years at an annual rate r compounded n times a year is the principal times (1 + r ÷ n) raised to n × t. The calculator shows the balance, the interest earned and the number of compounding periods.
A = P × (1 + r/n)^(n×t)interest = A − PHow often interest compounds
More frequent compounding adds a little more, because interest starts earning sooner. For $10,000 at 5% over 10 years, monthly compounding ends about $181 higher than yearly compounding, and daily only slightly more than monthly. The effective annual yield in the table shows the same effect as a single yearly rate.
APY versus APR
Savings accounts usually quote the annual percentage yield (APY), which already includes compounding. Loans usually quote the annual percentage rate (APR). A 5% rate compounded monthly equals an APY of about 5.116%. When comparing accounts, compare APYs.
The rule of 72
Dividing 72 by the annual rate estimates how many years it takes money to double: about 14.4 years at 5% and 9 years at 8%. It is a shortcut; the calculator gives the exact figure.
What this model leaves out
The model has no deposits, withdrawals, fees, taxes or rate changes. For monthly deposits, use the Savings Calculator; for investments with contributions and fees, use the Investment Calculator. Market returns are not guaranteed.
$10,000 at 5% for 10 years
| Compounding | Balance | Interest | Effective annual yield |
|---|---|---|---|
| Annually | $16,288.95 | $6,288.95 | 5.000% |
| Quarterly | $16,436.19 | $6,436.19 | 5.095% |
| Monthly | $16,470.09 | $6,470.09 | 5.116% |
| Daily | $16,486.65 | $6,486.65 | 5.127% |
Frequently asked questions
How is compound interest calculated?
A = P × (1 + r/n)^(n×t), where n is the number of compounding periods per year.
How much will $10,000 grow in 10 years at 5%?
About $16,470.09 with monthly compounding.
Does daily compounding make a big difference?
Only a small one compared with monthly compounding at typical savings rates.
What is the difference between APY and APR?
APY includes compounding; APR is the simple annual rate.
How long does it take money to double?
Roughly 72 divided by the rate in years; about 14.4 years at 5%.
Can I add monthly deposits?
Use the Savings Calculator for regular deposits.
Are taxes included?
No. Interest may be taxable depending on the account.
What to keep in mind
This model has no deposits, withdrawals, fees, taxes or changing rates.
Results are rounded for display in US format, with money in dollars and cents; CSV exports keep full calculation precision. This is a calculation summary, not an official certificate.