CalcTray

Compound Interest Calculator

See how your savings and investments grow over time with the power of compound interest and regular contributions.

By Drew Budwin · Last updated July 2026 · Methodology

Embed this calculator

Add it to your website or blog

Embed this calculator

Paste this code into your website's HTML.

Optional: auto-resize iframe to fit content

Add this snippet to your page so the iframe height adjusts automatically after each calculation:

How We Calculate This

How Compounding Frequency Changes Your Return

Compounding frequency is how often earned interest gets added back to your balance so it can earn more. This calculator supports daily, monthly, quarterly, semi-annual, and annual compounding. The more often it compounds, the more you end up with, though the gap narrows as frequency rises.

Take $10,000 at a 6% annual rate for 10 years with no contributions. Compounded annually it grows to about $17,908. Compounded quarterly, about $18,140. Compounded daily, about $18,220. Same 6% headline rate, roughly $300 apart, entirely because of how often interest posts.

APR vs. APY: Why the Same Rate Earns Different Amounts

APR (annual percentage rate) is the flat yearly rate before compounding. APY (annual percentage yield) is what you actually earn once compounding is included, so it is always equal to or higher than the APR. A 6% APR compounded quarterly is about a 6.14% APY. When a bank advertises a savings rate, it usually quotes APY; when it quotes a loan, it quotes APR. Enter the APR here and pick the matching frequency, and the results reflect the true APY.

Compound Interest Calculator Formula

This calculator uses the compound interest formula with periodic contributions:

A = P(1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) - 1] / (r/n)

where P is the principal, r is the annual rate, n is compounding frequency, t is years, and PMT is the periodic contribution. Unlike simple interest, compound interest allows your money to grow at an accelerating rate over time.

How to Use This Calculator

  1. Enter the amount you are starting with as the Initial Principal.
  2. Enter the amount you plan to add each month as the Monthly Contribution.
  3. Enter your expected Annual Interest Rate (e.g., 7 for 7%).
  4. Enter the Number of Years you plan to invest.
  5. Choose how often interest is compounded (daily, monthly, quarterly, semi-annually, or annually).
  6. Click Calculate to see your future value, total contributions, total interest earned, and a year-by-year breakdown.

Frequently Asked Questions

What is compound interest?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This creates a snowball effect where your money grows at an accelerating rate over time, unlike simple interest which is only calculated on the original principal.

How does compounding frequency affect my returns?

The more frequently interest is compounded, the more you earn. Monthly compounding produces slightly higher returns than quarterly, which in turn beats semi-annual or annual compounding. The difference is most noticeable at higher interest rates and over longer time periods.

What is the Rule of 72?

The Rule of 72 is a quick way to estimate how long it will take for your investment to double. Simply divide 72 by your annual interest rate. For example, at a 6% annual return, your money would roughly double in 72 / 6 = 12 years.

How much should I contribute each month?

The amount you should contribute depends on your financial goals, income, and expenses. A widely used benchmark is to save 15%–20% of your gross income for retirement, including any employer match. Even small increases in monthly contributions can make a significant difference over decades. If you have a specific savings target in mind, the savings goal calculator can tell you exactly how much to set aside each month.

Does this calculator account for taxes or inflation?

This calculator shows nominal growth and does not factor in taxes, inflation, or investment fees. To account for inflation, you can subtract the expected inflation rate (typically around 2%–3%) from your annual interest rate before calculating.

How do I calculate quarterly compound interest?

Set the compounding frequency to Quarterly. The calculator then adds interest to your balance four times a year (every 3 months) instead of once, which produces a slightly higher ending balance than annual compounding at the same rate.

What is the difference between APR and APY?

APR is the yearly rate before compounding. APY is what you actually earn after compounding is applied, so it is always equal to or greater than the APR. For example, a 6% APR compounded monthly works out to about a 6.17% APY.

What is the difference between simple and compound interest?

Simple interest is calculated only on the original principal (Interest = P × r × t). Compound interest is calculated on the principal plus all previously accumulated interest. Over time, compound interest grows exponentially while simple interest grows linearly.

Further Reading

Related Calculators

Savings Goal Calculator

Calculate how much you need to save each month to reach your financial goal on time.

FIRE Calculator

Find your financial independence number, see how many years until you can retire early, and track your progress year by year.

Long-Term Rental Calculator

See a rental's cash flow, cap rate, cash-on-cash return, and IRR over your full holding period, including utilities and every operating cost.