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Compound Interest Calculator

Calculate how your investments grow over time with compound interest.

Future Value

$6,416.79

Total Interest

$1,416.79

Total Deposits

$5,000.00

Effective Rate (APY)

5.12%

All-Time Return

28.34%

Time to Double

14.4 years

Nominal Rate

5.00%

Yearly Breakdown

YearTotal DepositsAccrued InterestBalance
1$5,000.00$255.81$5,255.81
2$5,000.00$524.71$5,524.71
3$5,000.00$807.36$5,807.36
4$5,000.00$1,104.48$6,104.48
5$5,000.00$1,416.79$6,416.79

How to Use

  1. 1

    Enter your initial investment amount in the "Initial Investment" field

  2. 2

    Set your annual interest rate — if you have a savings account, check your APY

  3. 3

    Choose your deposit frequency (None, Weekly, Monthly, etc.) and enter the contribution amount

  4. 4

    Select the compounding frequency (Daily, Monthly, Quarterly, etc.)

  5. 5

    Enter the number of years for your investment

  6. 6

    View your results: future value, total interest, effective rate, and yearly breakdown

Examples

Good Examples

Long-term savings with monthly deposits

$5,000 initial + $200/month at 5% for 20 years ≈ $85,719

Understanding compounding frequency

$10,000 at 5% compounded monthly → effective rate (APY) = 5.12%

Doubling your money (Rule of 72)

At 6% annual rate, money doubles in approx. 72 ÷ 6 = 12 years

Bad Examples

Using unrealistic returns

Expecting 20%+ annual returns consistently

Ignoring inflation

At 3% inflation, a 5% nominal return is only ~2% real return

Confusing nominal and effective rate

5% compounded monthly is NOT 5% effective — it's 5.12% APY

Common Mistakes

  • Confusing nominal rate with effective rate (APY) — compounding increases your actual return
  • Using unrealistic annual returns — historical stock market average is 7-10%
  • Ignoring inflation — at 3% inflation, your real returns are lower than nominal
  • Not accounting for taxes on investment gains
  • Overlooking fees and expense ratios that reduce your actual returns
  • Starting too late — even a few years of delay can cost thousands in lost compound growth

Frequently Asked Questions

Q

Daily vs monthly compounding?

More frequent compounding (daily) results in slightly higher returns than less frequent (monthly or annual). The difference is usually small for typical investment returns.

Q

Does inflation matter?

Yes, inflation reduces the real value of your returns. Consider subtracting the inflation rate from your expected return for a more realistic estimate.

Q

Can I add monthly deposits?

Yes, this calculator supports monthly contributions in addition to your initial investment.