Compound Interest Calculator
Savings calculator: project how a balance grows with compound interest and regular deposits, with the year-by-year breakdown, exact formula and editable assumptions.
Enter a rate and timeframe to see the balance grow with compound interest.
Summary
Enter a rate and timeframe to see the working behind the projection.
Working
- i = annual rate ÷ periods per year (12 monthly, 4 quarterly, 1 annually)
- each period: interest = balance × i, then balance = balance + deposit
- interest is rounded half-up to the cent as it is credited
- closed form: FV = P × (1 + i)ⁿ + C × ((1 + i)ⁿ − 1) ÷ i, with an extra (1 + i) factor for start-of-period deposits
- the simulation and the closed form are compared every time; a mismatch beyond per-period rounding is a failure, not a warning
Assumptions
- The rate is constant for the whole projection and interest is credited on the stated cycle.
- Deposits are made in full every period, and nothing is withdrawn.
- Tax on interest, account fees and inflation are excluded from the nominal figures.
Limitations
- A projection over many years is an arithmetic illustration, not a prediction: real returns vary and can be negative.
- Variable-rate accounts, introductory bonus rates and conditions attached to bonus interest are not modelled.
- No product, provider or rate is being offered or compared here.
- Result accuracy class A: deterministic arithmetic on the figures you enter.
Common questions
How does compound interest work?
Compound interest is interest computed on a balance that already includes previously credited interest. Each period, the calculator applies the period rate to the current balance, adds the interest to the balance, and the next period's interest is computed on that larger amount. That is why growth accelerates over time rather than staying linear, and why the year-by-year table here shows interest earned rising even when deposits stay constant.
What difference does the compounding frequency make?
The annual rate you enter is divided by the number of compounding periods per year, and interest is credited at that frequency. More frequent compounding credits interest earlier, so later periods earn interest on it sooner; the gap between monthly and yearly compounding widens as the rate and the time horizon grow. Switching the frequency here recomputes the whole schedule, so the exact difference for your inputs is visible rather than estimated.
How are regular deposits treated in the calculation?
A deposit is added every compounding period, either at the start of the period (before interest is computed, so the deposit earns interest in that same period) or at the end (after interest is computed). The timing option controls which, and the assumptions panel states the setting in force. The projection is simulated period by period in exact cents rather than read off a single closed-form figure, and the working shows both.
Is a compound interest projection guaranteed?
No. The projection holds the rate you entered constant for the whole term and includes no fees or tax unless you have built them into your inputs. Real accounts reprice, and returns on market investments vary from year to year. The result is general information computed from your own inputs. The assumptions are listed with the result so it is clear exactly what was, and was not, modelled.
What formula does this calculator use?
The schedule is produced by simulating every compounding period: apply the period rate to the balance, round the interest to the cent, add any deposit at its configured timing. The closed-form future-value formula for an annuity is computed alongside the simulation as a cross-check and reported with the result, and the working panel shows the steps with your numbers substituted in, so the two figures can be checked against each other.
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