Compound Interest Calculator: Future Value & APY

How to use this compound interest calculator

Enter the starting amount, the annual interest rate and the number of years.
Pick how often the interest compounds: annually, quarterly, monthly or daily.
Read the large figure: the future value, with the total interest and the effective annual rate (APY) alongside.

What compound interest is

Compound interest is interest that earns interest. Each time interest is credited, the next period's interest is calculated on the original amount plus everything already earned, so the balance grows faster than a straight line. The more often it compounds — annually, quarterly, monthly or daily — the sooner each slice of interest starts earning its own.

It is the model behind savings accounts, certificates of deposit and any investment whose returns are left in place rather than withdrawn. Use it to compare two accounts that quote the same rate but compound on different schedules, or to see what a lump sum could grow to over a chosen number of years. It models a single starting amount only — regular deposits are not included.

Reading the growth chart

The chart under the result draws your balance across the whole term. The blue line is the compound growth this calculator works out; it curves upward because each period's interest starts earning interest of its own. The orange line shows the same amount, at the same rate, earning simple interest instead — the widening gap between the two lines is exactly what compounding adds. The dashed line marks your starting amount, so everything above it is interest. Move your mouse over the chart, or touch it, to read the exact balance for both methods at any point along the way.

The formulas

Future value

A = P × (1 + r ÷ n)^{n × t}

P is the starting amount, r the annual rate as a decimal, n the compounding periods per year and t the years. Each period multiplies the balance by (1 + r ÷ n), so growth compounds across every period in the term.

Interest earned

I = A − P

The future value minus the starting amount: the part of the final balance that did not come from your original money. On the default figures it is $20,096.61 − $10,000 = $10,096.61 — slightly more than the amount you started with.

Effective annual rate (APY)

APY = (1 + r ÷ n)ⁿ − 1

The yearly rate you actually earn once compounding is counted, so different frequencies can be compared like with like. A stated 7% compounded monthly produces an APY of 7.229%.

Examples

Example	Principal	Rate	Years	Final amount
Saver, monthly compounding	$1,000	5%	10	$1,647.01
Saver, quarterly compounding	$25,000	4%	5	$30,504.75
Long-term saver, monthly compounding	$5,000	5%	20	$13,563.20
Investor, annual compounding	$10,000	7%	10	$19,671.51
Investor, monthly compounding	$10,000	7%	10	$20,096.61
Investor, daily compounding	$10,000	7%	10	$20,136.18

Three mistakes people make with compound interest

Using the nominal rate as if it were the APY

A 7% rate compounded monthly is not a 7% annual yield — it is 7.229%. Over 10 years on $10,000, monthly compounding produces $20,096.61 while annual compounding produces $19,671.51, a $425.10 gap from frequency alone.

Adding deposits by mistake

This calculator grows one lump sum and nothing else. If you are adding money every month, the result here will understate your real balance, because each deposit would start compounding from its own date.

Forgetting inflation and fees

A 7% return with 3% inflation is roughly a 4% real return, and fund or account fees come off the top before compounding starts. This calculator shows the nominal growth; what you keep is lower.

Frequently asked questions

What is compound interest?

Interest calculated on the original principal plus all interest already credited. It grows faster than simple interest because each period's earnings join the base for the next period.

How is compound interest calculated?

With A = P × (1 + r ÷ n)^(n × t): the starting amount P, the annual rate r as a decimal, the number of compounding periods per year n, and the years t. The steps under the calculator show the formula with your numbers in it.

What is the difference between APR and APY?

APR is the quoted nominal rate; APY is the rate you actually receive after compounding within the year. A 7% APR compounded monthly is a 7.229% APY, which is the figure to use when comparing two accounts.

How much will $10,000 grow at 7% for 10 years?

With monthly compounding, $10,000 becomes $20,096.61, for $10,096.61 of interest. With annual compounding the same inputs produce $19,671.51.

Does compounding frequency really matter?

Yes, though the effect is modest at short horizons and larger over decades. At 7% for 10 years on $10,000, annual compounding gives $19,671.51 and daily compounding gives $20,136.18.

Can I use this for regular monthly deposits?

No. This page models a single lump sum left to grow. A series of deposits needs a future-value-of-an-annuity calculation, which is a different formula.

Privacy and important information

This calculator runs entirely in your browser: your numbers are never sent to a server, stored, or shared. It is a calculation aid, not financial advice — real accounts and investments vary with fees, taxes and changing rates.

Part of RahaKit's free finance calculators.

Compound Interest Calculator