Compound Interest Calculator
See how money grows with compounding.
About this tool
The Compound Interest Calculator shows exactly how your principal grows when interest compounds over time, with options for different compounding frequencies - annual, quarterly, monthly, or daily. Understanding compounding is foundational to saving and investing.
How it works
- Enter your starting principal.
- Enter the annual interest rate.
- Select the compounding frequency (annually, quarterly, monthly, daily).
- Enter the time period in years.
- Review the final balance and total interest earned.
Example use cases
- High-yield savings account: $5,000 at 5% APY compounded monthly for 3 years grows to approximately $5,808 - earning $808 in interest.
- Long-term investment: $20,000 at 8% compounded annually for 25 years grows to roughly $136,900, more than 6× the original amount.
Frequently asked questions
Does compounding frequency make a big difference?
At typical savings rates (3-6%), the difference between monthly and daily compounding is small - often less than $50 per year on $10,000. The interest rate and time horizon matter far more.
How is APY different from the interest rate I enter?
APY (Annual Percentage Yield) incorporates compounding frequency into a single annual figure. For savings accounts, the APY shown on the account is the effective annual rate, equivalent to entering that rate with annual compounding here.