Utilore

Compound Interest Calculator

Put in what you start with, what you add each period and for how long. The total comes with the three numbers that keep it honest: how much of it is your own money, the effective annual rate once the compounding frequency is taken into account, and — if you fill in an inflation rate — what the total is worth in today's money.

Put in what you start with, what you add and for how long. The total, what you put in yourself and what the interest added are all shown side by side.

You end up with —

Of that, your own money
—
Added by interest
—
Effective annual rate
—
YearBalanceYour own

Nothing is sent anywhere — the figures stay in this browser. Two of the settings decide more than the rate does. How often interest is added matters: 12 % added monthly is 12.68 % over a year, which is why the effective rate is shown next to the total and why two offers should be compared on that rather than on the headline number. And inflation is not a detail: at 3 % a year, money loses nearly half its purchasing power over twenty years, so a large future total and a modest present one can be the same thing.

Nearby: Loan Calculator, Percentage Calculator, Car Loan Calculator, Currency Converter

How to use

  1. Enter the starting amount, the regular contribution, the rate and the number of years.
  2. Choose how often interest is added. Monthly is the usual default for savings accounts; bonds and deposits are often annual.
  3. Say whether the contribution goes in at the start or the end of each period — it is worth one period of growth, which adds up over decades.
  4. Add an inflation rate to see the total in today's money, and a target amount to find out how long it takes to get there.

Good to know

The rate on the poster is not the rate you get

Twelve per cent added once a year is twelve per cent. Twelve per cent added monthly is 12.68 % over the year, because each month's interest starts earning interest of its own. The gap widens with the rate: at 20 % nominal, monthly compounding gives 21.94 %. This is why two savings products advertised at the same rate can pay noticeably differently, and why the effective annual rate is shown here next to the total. When comparing offers, compare that number — it is the only one that means the same thing in both.

When the money goes in matters

A contribution made at the start of a period earns interest for that period; one made at the end does not. Over a single month at a modest rate the difference is invisible, and over thirty years of monthly payments it is around one period of growth on the whole balance — real money, and the reason two calculators can disagree while both being right. Most savings plans debit at the start of the month and most calculators assume the end, so this is a setting here rather than an assumption.

A large number in the future is a smaller number today

At three per cent inflation a year — an unremarkable long-run figure — money loses nearly half its purchasing power over twenty years. A projection that ends in a big round total says almost nothing on its own: the same total means one thing after ten years and quite another after forty. Fill in an inflation rate and the page shows both, the nominal figure and what it would buy at today's prices. The second number is the one to plan with.

Frequently asked questions

What is compound interest, briefly?

Interest that earns interest. Simple interest pays the same amount every period because it is always calculated on the original sum; compound interest adds each period's interest to the balance, so the next period is calculated on a larger number. Over a few years the difference is modest; over a few decades it is most of the total.

Which compounding frequency should I choose?

The one your account actually uses — it is in the terms, usually as «interest is calculated monthly» or «paid annually». If you are estimating rather than matching a real product, monthly is the common case for savings accounts and the one most calculators assume.

Should contributions be at the start or the end of the period?

At the start if you pay in on the first of the month, which is how most standing orders are set up; at the end if the money arrives after the interest is worked out. If you do not know, leave it at the end — that is the conservative choice and matches what most other calculators do.

Does it account for tax?

No, and that matters for the result. Interest is taxable in most places, whether at source or through a return, and the effect over decades is large. Treat the total here as before tax and adjust for your own situation — a tax-free account and a taxable one at the same rate are not the same investment.

Are my figures sent anywhere?

No. Everything is worked out in this browser and kept there so it survives a reload. Nothing is sent to a server, and the page works with the network switched off.

Related tools