Compound Interest Calculator

The standard formula is A = P(1 + r/n)^(nt), where P is the starting principal, r is the annual interest rate as a decimal, n is how many times interest compounds per year, and t is time in years. The calculator also supports regular monthly contributions, which are added after each compounding period. This is the same math banks use for savings accounts, CDs, and investment growth projections.

Set compounding frequency to daily (n = 365). The calculator divides your annual rate by 365 and applies interest each day to your balance plus any contributions. Daily compounding yields a slightly higher effective return than monthly compounding at the same nominal rate because interest is added to principal more often. Enter principal, rate, years, and optional monthly deposits to see the daily-compounded total.

Compounding frequency is how often earned interest is added back to your balance so future interest is calculated on a larger amount. Annual compounding adds interest once per year; monthly adds it 12 times; daily adds it 365 times. More frequent compounding increases your effective annual yield (APY) even when the stated interest rate stays the same.

APY (Annual Percentage Yield) is the effective annual return after compounding is included. A 5% nominal rate compounded monthly has an APY of about 5.116%; compounded daily it is slightly higher. APY makes it easier to compare savings accounts and CDs with different compounding schedules. This calculator shows APY alongside the projected balance.

The Rule of 72 is a quick estimate for how long it takes money to double: divide 72 by your annual interest rate. At 6% compounded annually, your balance roughly doubles in 72 ÷ 6 = 12 years. It is an approximation, not exact math, but useful for mental comparisons. Use the calculator for precise projections with contributions and any compounding frequency.