Compound Interest CalculatorFree online financial calculator — instant results, no sign-up
Compare compounding frequencies and see the effective rate.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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How the result changes with principal
Each row below was calculated with this tool, keeping every other input at its default and changing only principal from half to one and a half times the default value. Use it to see how sensitive the answer is before you enter your own numbers.
| Principal ($) | Future value | Interest earned | Effective annual rate |
|---|---|---|---|
| 2,500 | $4,548.49 | $2,048.49 | 6.1678% |
| 3,750 | $6,822.74 | $3,072.74 | 6.1678% |
| 5,000 (default) | $9,096.98 | $4,096.98 | 6.1678% |
| 6,250 | $11,371.23 | $5,121.23 | 6.1678% |
| 7,500 | $13,645.48 | $6,145.48 | 6.1678% |
About the Compound Interest Calculator
This calculator projects the growth of a lump-sum investment over time under different compounding schedules, ranging from annual compounding to continuous compounding. It is designed for savers, investors, and students comparing nominal interest rates against true annual yields. By varying the compounding frequency, users can see both total accumulated interest and the resulting effective annual rate.
- Principal
- The initial lump sum invested or borrowed, entered in dollars (e.g., $5,000; must be zero or greater).
- Annual rate
- The stated nominal annual interest rate as a percentage (e.g., 6 for 6%).
- Years
- The total duration of the investment period in years (e.g., 10).
- Compounding
- The frequency at which interest is credited: Annually (1/year), Semiannually (2/year), Quarterly (4/year), Monthly (12/year), Daily (365/year), or Continuously.
Formula and method
Periodic compounding: A = P × (1 + r / k)^(k × t), EAR = (1 + r / k)^k − 1 Continuous compounding: A = P × e^(r × t), EAR = e^r − 1 Interest earned: I = A − P
- AFuture value (total balance at maturity)
- PPrincipal balance
- rNominal annual interest rate in decimal form (rate / 100)
- kCompounding periods per year (1, 2, 4, 12, or 365)
- tTime in years
- eEuler's number (base of the natural logarithm, approximately 2.71828)
- EAREffective annual rate (the true annualized return accounting for compounding)
- ITotal interest earned over the duration
The tool converts the nominal rate into a decimal and applies either discrete periodic compounding using the selected frequency count k (365 for daily) or continuous exponential compounding via Euler's constant. Future value and total interest earned are formatted as standard currency values, while the effective annual rate is displayed as a percentage rounded to four decimal places.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Principal5000 $
- Annual rate6 %
- Years10 years
- CompoundingMonthly
Results
- Future value$9,096.98
- Interest earned$4,096.98
- Effective annual rate6.1678%
How to use the Compound Interest Calculator
- 1Divide the annual interest rate by 100 to convert it into a decimal rate r.
- 2Identify the compounding factor k based on the selected frequency, or set the calculation to use e^(r × t) if continuous compounding is chosen.
- 3Calculate the future value A by multiplying the principal P by the compounding growth factor.
- 4Subtract the principal from the future value to obtain total interest earned, and calculate the effective annual rate across one year.
Reading your result
Future value shows the total accumulated balance at the end of the term, while interest earned isolates the total profit generated on top of the original deposit. The effective annual rate (EAR) reveals the actual percentage earned over a single year, making it easy to compare accounts with identical nominal rates but different compounding schedules.
Limitations
The calculation assumes a single fixed initial principal with no regular deposits, periodic withdrawals, or rate changes over time. It uses a standard 365-day year for daily compounding without adjusting for leap years, and it does not deduct taxes, inflation, or account maintenance fees.
Common questions
Why is the effective annual rate higher than the stated annual rate?+
When interest compounds more than once per year, previously earned interest begins earning its own interest within that same year, resulting in an effective annual rate that exceeds the stated nominal rate.
What does continuous compounding mean?+
Continuous compounding represents the mathematical limit of compounding frequency, where interest is calculated and added to the principal balance at every infinitesimally small instant using the natural exponential constant e.
How does daily compounding compare to continuous compounding in practice?+
For most practical balances and standard interest rates, the difference between daily compounding (365 periods per year) and continuous compounding amounts to only a few cents per year.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.