Compound Interest Calculator
See how compounding frequency changes the outcome, and how much of the final balance is growth rather than deposits.
Future balance
$18,193.97
After 10 years, compounding 12× a year
Interest earned
$8,193.97
Effective annual rate
6.17%
- Starting amount
- $10,000.00
- Simple interest for comparison
- $6,000.00
- Extra from compounding
- $2,193.97
- Growth multiple
- 1.82×
- Effective annual rate
- 6.17%
How this was calculated
- 1.Nominal rate r = 0.0600 and 12 compounding periods per year.
- 2.Periods in total: 12 × 10 = 120.
- 3.A = $10,000.00 × (1 + 0.005000)^120 = $18,193.97.
- 4.Interest = $18,193.97 − $10,000.00 = $8,193.97.
Assumes a constant rate with no tax, fees or withdrawals.
How the compound interest calculation works
Compound interest pays interest on interest. Each time interest is credited it joins the balance, so the next period is calculated on a larger amount — the source of the curve everyone talks about.
The more often interest is credited, the higher the effective annual rate for the same nominal rate. Daily compounding at 6% is worth about 6.18% a year, while annual compounding is exactly 6%.
Worked example
$10,000 at 6% for 10 years, compounded monthly.
- →n·t = 12 × 10 = 120 periods
- →A = 10,000 × (1 + 0.005)¹²⁰
- →A = 10,000 × 1.8194
Answer: About $18,194 — $8,194 of it interest, versus $6,000 with simple interest.
Compound Interest FAQs
What is the rule of 72?
Divide 72 by the annual rate to estimate the years needed to double your money. At 6% that is roughly 12 years, which is close to the exact answer of 11.9 years.
Which compounding frequency should I choose?
Match your account. Savings accounts usually compound monthly or daily; bonds may pay annually. More frequent compounding always produces a slightly higher end balance at the same nominal rate.
Does this include regular deposits?
No — this tool compounds a single lump sum. Use the savings or investment calculator to add monthly contributions.
Compound Interest Calculator is part of the financial calculators collection on Calcora, alongside 8 other tools. Results are calculated in your browser and are for information only — see our disclaimer.
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