Compound interest calculator
What a lump sum and a monthly deposit grow to, year by year.
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Example
A down-payment fund: $10,000 now and $500 a month for 5 years at 4.25%
A couple saving for a first home keeps $10,000 in an online savings account and adds $500 at the end of every month. Typed in: Starting amount 10,000, Monthly deposit 500, Interest rate 4.25, Years 5, Interest credited Monthly, Deposits made At the end of each month, Tax left empty, Currency Automatic (US dollar).
- Each month the balance earns 4.25% ÷ 12, added at the month’s end; a deposit made at the end of a month starts earning the month after.
- They pay in $10,000 + 60 × $500 = $40,000. The interest grows each year, $551.64 in year 1 and $1,763.36 in year 5, because it is earned on a bigger balance.
- Under the totals the result adds that at this rate money doubles in about 16.3 years.
| Year | Paid in | Interest | Balance |
|---|---|---|---|
| 1 | $16,000.00 | $551.64 | $16,551.64 |
| 2 | $22,000.00 | $835.58 | $23,387.22 |
| 3 | $28,000.00 | $1,131.81 | $30,519.03 |
| 4 | $34,000.00 | $1,440.89 | $37,959.92 |
| 5 | $40,000.00 | $1,763.36 | $45,723.29 |
After 5 years: $45,723.29, of which $5,723.29 is interest. Deposits at the start of each month: $45,841.44; interest credited daily: $45,733.95, yearly: $45,610.37. With 22 typed as the tax on interest, as a rough stand-in for a 22% bracket: $44,380.77.
How it works
- Type a starting amount, a monthly deposit, or both.
- Type the yearly interest rate and the number of years, and choose how often the interest is credited.
- The final balance appears first, then what you paid in, the interest, and the balance at the end of every year.
Frequently asked questions
- How does compound interest work?
- Interest is added to the balance and then earns interest itself. $10,000 at 5% becomes $10,500 after a year and $11,025 after two: the second year pays interest on the first year’s $500 too.
- Does it matter how often interest is credited?
- A little: the more often, the more interest earns interest. At 5%, monthly crediting gives an effective 5.12% a year, daily 5.13%.
- How are monthly deposits counted?
- Each deposit earns interest from the month it is paid in — from the start of the month or the end, as you choose. Within a crediting period the interest accrues and is added at its end, as banks do.
- What is the tax option for?
- Where interest is taxed as it is paid — a flat tax on savings, or the withholding on deposit interest — type the rate, and each credit is reduced by it. Leave it empty to see the gross figures.
- Should I type the interest rate or the APY?
- The interest rate, with the crediting your bank uses: the calculator compounds it itself. The APY already includes the compounding, so to use it choose Yearly. $10,000 at a 4.25% APY grows to $10,425.00 in a year; typing 4.25 with Daily crediting gives $10,434.13, a little more than that APY promises.
- Is anything uploaded?
- No. It is worked out in your browser, and nothing you type leaves your computer.