Compound Interest Calculator

Interest paid on your interest as well as on your original deposit. Simple interest pays the same amount every period because it is always calculated on the starting balance. Compound interest recalculates on the balance you actually hold, so each period starts from a slightly bigger number than the last. Over a few years the difference is modest; over thirty it is most of the money.

The nominal rate is quoted per year but credited per period; the annual percentage yield is what you actually end up with after a year of compounding. Regulation DD states the APY in dollars — APY = 100[(1 + Interest/Principal)^(365 ÷ days in term) − 1] — and directs that an account with no maturity date be figured over an assumed 365-day term. For a rate compounded n times a year that reduces to 100[(1 + r/n)^n − 1], which is how this calculator reports it: a 5% nominal rate compounded daily works out at 5.13%. Institutions must advertise the APY precisely because the nominal rate on its own is not comparable between accounts.

Yes, though less than people expect. $10,000 at 5% for ten years grows to $16,288.94 compounded annually and $16,470.09 compounded monthly — about $181 apart. The frequency is worth real money, but the rate, the amount you add and the number of years all move the answer far more. Do not choose a worse rate to get more frequent compounding.

It depends on when the money actually lands. A deposit made at the beginning of a period earns that period’s interest; one made at the end does not. On $500 a month for ten years at 7% the difference is $504.84 — one extra period of growth on every deposit. Payroll deductions usually land through the month, so the end-of-period assumption is the conservative default this calculator uses.

Because the honest answer to "does a deposit made between two compounding dates earn anything?" depends on the institution’s balance-computation method under 12 CFR § 1030.7, which is not something you can read off a rate sheet. Tying deposits to the compounding period makes that assumption visible in the form rather than burying it in the arithmetic, and it is the convention the standard annuity formulas assume.

No. Every figure here is nominal and before tax. Inflation reduces what the final balance buys, interest in a taxable account is generally taxable in the year it is credited, and an annual fee is a direct subtraction from the rate. A rough way to see the real return is to enter your rate minus expected inflation, which gives the balance in today’s money.