FinanceCalculator4 parts · 1 min
Compound interest calculator
See what a starting amount grows to when a yearly rate compounds monthly, quarterly, or once a year.
The answer
Future value is the starting amount times (1 + rate ÷ compounds per year), raised to compounds times years. Interest earned is that result minus the amount you started with.
How this works
Let P be the starting amount, r the annual rate as a decimal, n the number of compounds in a year, and t the years. The future value is P × (1 + r ÷ n) raised to n × t. Monthly compounding uses n = 12. Once a year uses n = 1.
No deposits are added along the way, and nothing is withdrawn. A loan payment is a different formula: there the balance falls. This page only grows one starting amount.
Examples
$1,000 at 5% for 2 years, compounded monthly
About $1,104.94. The interest is about $104.94.
Common mistakes
- Entering 5 for a 5% rate and also dividing by 100 yourself. The form treats 5 as 5 percent.
- Using the loan payment as if it were the same growth formula.
Questions
What does compounds per year mean?
How often the rate is applied. 12 is monthly, 4 is quarterly, and 1 is once a year.