How to use Compound Interest Calculator
- Enter a starting amount, annual rate, and time in years.
- Choose how often interest is added. If desired, enter a deposit for the end of each of those periods.
- Compare the final balance, money contributed, and interest earned.
A closer look
Compounding earns interest on earlier interest. Without deposits, the balance is P × (1 + r/n)ⁿᵗ, where P is the starting amount, r is the annual rate as a decimal, n is periods per year, and t is years. Equal end-of-period deposits add C × ((1 + r/n)ⁿᵗ − 1) ÷ (r/n). At a zero rate, deposits are simply added. For example, 1,000 at 10% compounded yearly for 2 years becomes 1,210 with no further deposits.
A practical example
With no deposits, 1,000 at 10% compounded yearly becomes 1,210 after two years. This is an illustrative rate, not a promised investment return.
A useful tip
Deposit timing matches compounding: monthly means one deposit at the end of each month; yearly means one at the end of each year. Choose a whole number of deposit periods when using deposits.
Good questions. Simple answers.
Are returns guaranteed?
No. This is a constant-rate illustration. It excludes fees, taxes, inflation, and market changes. A negative rate illustrates decline, not a prediction.
What does daily mean?
Daily uses 365 periods per year. It is a simplified convention, not a calculation based on actual calendar dates or a specific bank’s terms.
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