How it works
Compound interest means you earn interest on your interest. Each time interest is added to your balance, the next round of interest is worked out on that bigger balance, so your money grows a little faster every period.
Two things make the biggest difference: the interest rate and how long you leave the money alone. How often interest is compounded matters too, but less than most people expect. Regular deposits add up quickly because each one starts earning compound interest from the month you make it.
This calculator assumes deposits are made at the end of each month and that the rate stays the same for the whole time.
The formula
The future value of your starting amount is:
FV = P × (1 + r / n)n × t
- P is your starting amount
- r is the annual interest rate as a decimal (5% is 0.05)
- n is how many times a year interest is compounded (1 for yearly, 2 for twice a year, 4 for quarterly, 12 for monthly, 365 for daily)
- t is the time in years, with any extra months as a fraction (2 years and 6 months is 2.5). If that leaves part of a compounding period, the same formula still applies with a fractional power.
The part in brackets raised to a power, (1 + r / n)n × t, is the growth factor. It tells you what each 1 you put in grows to.
Monthly deposits grow like this:
Deposits FV = PMT × (growth factor − 1) ÷ i
- PMT is your monthly deposit
- i is the monthly interest rate. With monthly compounding it’s simply r / 12. With any other compounding, it’s the monthly rate that grows at the same pace: i = (1 + r / n)n / 12 − 1
Your total is the two added together. At a 0% rate there’s nothing to compound, so the total is your starting amount plus all your deposits.
Worked example
Want this with your own numbers? See Show the work above.
You put 10,000 into a savings account that pays 5% a year, compounded monthly, and add 100 at the end of every month for 10 years.
- The rate for each month is 5% ÷ 12 = 0.4167%.
- There are 10 × 12 = 120 compounding periods.
- The growth factor is (1 + 0.05 ÷ 12)120 = 1.647009 (rounded to 6 decimals).
- Your starting amount grows to 10,000 × 1.647009 = 16,470.09.
- Your deposits grow to 100 × (1.647009 − 1) ÷ (0.05 ÷ 12) = 15,528.23. (With the rounded growth factor you’d get 15,528.22. The calculator uses the full value.)
- Together that’s 16,470.09 + 15,528.23 = 31,998.32.
You put in 22,000 in total (10,000 up front plus 120 deposits of 100), so 9,998.32 of the final balance is interest.
FAQ
What’s the difference between simple and compound interest?
Simple interest is only ever worked out on the amount you first put in. Compound interest is worked out on your whole balance, including interest you’ve already earned. With 10,000 at 5% for 10 years, simple interest gives you 5,000. Monthly compounding gives you 6,470.09.
Does compounding daily instead of monthly make a big difference?
Not much. In the worked example, switching from monthly to daily compounding adds 24.94 over 10 years, on a balance of about 32,000. The rate and the time matter far more. Use the Compare button to see the difference with your own numbers.
When are my monthly deposits added?
At the end of each month, which is the usual assumption for savings calculations. If you deposit at the start of each month instead, each deposit earns one extra month of interest, so your real total would be slightly higher.
My account compounds yearly but I deposit monthly. How is that handled?
Your deposits earn the monthly rate that grows at the same pace as yearly compounding. That assumes each deposit earns interest from the month it arrives. Some accounts only pay interest on money that has been there since the last compounding date, which would give a slightly lower total.
Does this include taxes, fees, or inflation?
No. The result is what the balance would be before any tax on interest, account fees, or the effect of rising prices. Those vary by country and by account, so check them separately.
Why is my bank’s figure slightly different?
Banks may round interest to the cent each period, count days differently, or change their rate over time. This calculator keeps full precision until the final result and uses a 365-day year for daily compounding, so small differences are normal.
Sources
- Compound interest and future value formulas: OpenStax Contemporary Mathematics, section 6.4, Compound Interest
- Future value of regular deposits (ordinary annuities): OpenStax Contemporary Mathematics, section 6.6, Methods of Savings
- Partial compounding periods: J. Olivier, Business Math: A Step-by-Step Handbook, section 9.7, Determining the Number of Compounds
- Deposits on a different schedule from compounding (general annuities and the equivalent periodic rate): J. Olivier, Business Math: A Step-by-Step Handbook, section 11.2, Future Value of Annuities
Cite this page
APA (7th edition)
Mathlark. (2026, September 29). Compound interest calculator. https://mathlark.com/finance/compound-interest-calculator/
MLA (9th edition)
"Compound Interest Calculator." Mathlark, 29 Sept. 2026, mathlark.com/finance/compound-interest-calculator/.
For informational purposes only. This is not financial advice.