Compound Interest Calculator
Value after 10 years
7.23% effective yearly$54,713.58
- Total contributed
- $34,000.00
- Interest earned
- $20,713.58
Show how it’s worked outHide working
Lump sum: 10,000 × (1 + 7% ÷ 12)^(12 × 10), plus $200 added every month and compounded from then on. Interest earned is the final value minus everything you put in.
About Compound Interest
Compound interest is interest earned on interest. Each period the rate is applied to the whole balance — the original amount plus everything already earned — so growth speeds up the longer money is left alone.
Formula (lump sum): A = P × (1 + r ÷ n)^(n × t), where P is the starting amount, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years. Regular contributions are added at the end of each period and compound from then on.
The effective annual yield (APY) shows what the nominal rate really earns once compounding is included: 7% compounded monthly is 7.23% a year. Frequency matters much less than rate and time — doubling the years does far more than switching from monthly to daily compounding.
Common questions
- What is compound interest?
- Interest earned on both the original amount and the interest already added. Because each period's interest is calculated on a larger balance, growth accelerates over time.
- How often should interest compound?
- More frequent compounding earns slightly more, but the difference between monthly and daily is small. The rate and the time invested matter far more.
Growth by year
| Year | Added | Interest | Balance |
|---|---|---|---|
| 1 | 2,400.00 | 801.42 | 13,201.42 |
| 2 | 2,400.00 | 1,032.85 | 16,634.27 |
| 3 | 2,400.00 | 1,281.01 | 20,315.28 |
| 4 | 2,400.00 | 1,547.11 | 24,262.39 |
| 5 | 2,400.00 | 1,832.45 | 28,494.83 |
| 6 | 2,400.00 | 2,138.41 | 33,033.24 |
| 7 | 2,400.00 | 2,466.49 | 37,899.74 |
| 8 | 2,400.00 | 2,818.29 | 43,118.03 |
| 9 | 2,400.00 | 3,195.52 | 48,713.55 |
| 10 | 2,400.00 | 3,600.02 | 54,713.58 |