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Calculator

Compound Simple Daily Forex

Interest Interest Compounding Compounding

Currency:

$ € £ ₹ ¥

Initial balance:

₹ 10000

Interest rate:

20 % yearly

Years: Months:

3 0

Compound interval:

Monthly (12/yr)

Advanced options

Regular contributions (optional)

OPTIONAL

Deposits Withdrawals

Deposit amount (optional)

₹ 10000 monthly

Deposits made at what point in period?

Beginning End

Increase deposits yearly with inflation?

(optional)

Calculate

Calculation Projection

Future investment value

₹514,140.87
Total interest earned

₹144,140.87
Initial balance

₹10,000.00
Total additional deposits

₹360,000.00
Effective Annual Rate (APY)

21.939%

Summary

Initial deposit: ₹10,000.00

Interest rate: 20% yearly
Time: 3 years
Deposits: ₹10,000.00 monthly
Compounding: monthly

Projection breakdown

monthly yearly table graph

Total Total
Month Interest Balance
Deposits Interest

0 -- ₹10,000.00 -- ₹10,000.00

1 ₹333.33 ₹20,000.00 ₹333.33 ₹20,333.33

2 ₹505.56 ₹30,000.00 ₹838.89 ₹30,838.89

3 ₹680.65 ₹40,000.00 ₹1,519.54 ₹41,519.54

4 ₹858.66 ₹50,000.00 ₹2,378.20 ₹52,378.20

5 ₹1,039.64 ₹60,000.00 ₹3,417.83 ₹63,417.83

6 ₹1,223.63 ₹70,000.00 ₹4,641.46 ₹74,641.46

7 ₹1,410.69 ₹80,000.00 ₹6,052.15 ₹86,052.15

8 ₹1,600.87 ₹90,000.00 ₹7,653.02 ₹97,653.02

9 ₹1,794.22 ₹100,000.00 ₹9,447.24 ₹109,447.24

10 ₹1,990.79 ₹110,000.00 ₹11,438.03 ₹121,438.03

11 ₹2,190.63 ₹120,000.00 ₹13,628.66 ₹133,628.66

12 ₹2,393.81 ₹130,000.00 ₹16,022.47 ₹146,022.47

13 ₹2,600.37 ₹140,000.00 ₹18,622.85 ₹158,622.85

14 ₹2,810.38 ₹150,000.00 ₹21,433.23 ₹171,433.23

15 ₹3,023.89 ₹160,000.00 ₹24,457.12 ₹184,457.12

16 ₹3,240.95 ₹170,000.00 ₹27,698.07 ₹197,698.07

17 ₹3,461.63 ₹180,000.00 ₹31,159.70 ₹211,159.70

18 ₹3,686.00 ₹190,000.00 ₹34,845.70 ₹224,845.70

19 ₹3,914.09 ₹200,000.00 ₹38,759.79 ₹238,759.79

20 ₹4,146.00 ₹210,000.00 ₹42,905.79 ₹252,905.79

21 ₹4,381.76 ₹220,000.00 ₹47,287.55 ₹267,287.55

22 ₹4,621.46 ₹230,000.00 ₹51,909.01 ₹281,909.01

23 ₹4,865.15 ₹240,000.00 ₹56,774.16 ₹296,774.16

24 ₹5,112.90 ₹250,000.00 ₹61,887.06 ₹311,887.06

25 ₹5,364.78 ₹260,000.00 ₹67,251.85 ₹327,251.85

26 ₹5,620.86 ₹270,000.00 ₹72,872.71 ₹342,872.71

27 ₹5,881.21 ₹280,000.00 ₹78,753.92 ₹358,753.92

28 ₹6,145.90 ₹290,000.00 ₹84,899.82 ₹374,899.82

29 ₹6,415.00 ₹300,000.00 ₹91,314.82 ₹391,314.82

30 ₹6,688.58 ₹310,000.00 ₹98,003.40 ₹408,003.40

31 ₹6,966.72 ₹320,000.00 ₹104,970.12 ₹424,970.12

32 ₹7,249.50 ₹330,000.00 ₹112,219.62 ₹442,219.62

33 ₹7,536.99 ₹340,000.00 ₹119,756.62 ₹459,756.62

34 ₹7,829.28 ₹350,000.00 ₹127,585.90 ₹477,585.90

35 ₹8,126.43 ₹360,000.00 ₹135,712.33 ₹495,712.33

36 ₹8,428.54 ₹370,000.00 ₹144,140.87 ₹514,140.87

Additional contributions applied at the beginning of each period.

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Disclaimer: Whilst every effort has been made in building this

tool, we are not to be held liable for any damages or monetary
losses arising out of or in connection with the use of it. Full
disclaimer. This tool is here purely as a service to you, please
use it at your own risk.

On this page:

• How to calculate compound interest

• Using our interest calculator

• What is compound interest?

• Compound interest example

• Compounding with additional deposits

• Example chart

• Frequently asked questions

How to calculate compound interest

Compound interest is calculated using the

compound interest formula. To calculate your
future value, multiply your initial balance by one
plus the annual interest rate raised to the power
of the number of compound periods. Subtract
the initial balance if you want just the
compounded interest figure.

A = P(1+r/n)(nt)
Where:

A = the future value of the investment or loan

P = the principal investment or loan amount
r = the interest rate (decimal)
n = the number of times that interest is
compounded per period
t = the number of periods the money is
invested for

You can use a compound interest calculator

to create a projection of how much your savings
or investments might grow over a period of time
using the power of compound interest. We have
a separate article discussing variations of the
compound interest formula, should you be
interested.

Using our interest calculator

Our interest calculator gives you a future

balance and a projected monthly and yearly
breakdown for the time period. Here's how to
use it:

1 Enter an initial balance figure

2 Enter a percentage interest rate - either

yearly, monthly, weekly or daily

3 Enter a number of years or months, or a

combination of both, for the calculation

4 Select your compounding interval (daily,

monthly, quarterly or yearly compounding)

5 Include any regular monthly, quarterly or

yearly deposits or withdrawals

You can use the results as a guide to create a

saving strategy to maximise your future wealth.

What is compound interest?

The concept of compound interest, or 'interest

on interest', is that accumulated interest is
added back onto your principal sum, with future
interest calculations being carried out on the
total of both the original principal and already-
accrued interest. According to an article
published in the Journal of Economic Education
in 2016, less than one-third of the U.S.
population comprehends how compound
interest fundamentally works 1.

The idea of compound interest has been around

a long time, with limited evidence suggesting
ancient civilizations may even have known
about it. At the Louvre in Paris, there exists a
clay tablet from Babylon, possibly dating from
between 2000 to 1700 B.C., which appears to
show a compound interest problem. However, it
seems likely that it wasn't until medieval times
that mathematicians began to analyse
compound interest fully 2.

Compound interest example

Let's look at a simple example and say you have

$10,000 in your savings account, earning 5%
interest per year. Your first 10 years might look
like this:

Interest Interest End

Year
Calculation Earned Balance

Year 1 $10,000 x 5% $500 $10,500

Year 2 $10,500 x 5% $525 $11,025

Year 3 $11,025 x 5% $551.25 $11,576.25

$11,576.25 x
Year 4 $578.81 $12,155.06
5%

$12,155.06 x
Year 5 $607.75 $12,762.82
5%

$12,762.82 x
Year 6 $638.14 $13,400.96
5%

$13,400.96 x
Year 7 $670.05 $14,071
5%

Year 8 $14,071 x 5% $703.55 $14,774.55

$14,774.55 x
Year 9 $738.73 $15,513.28
5%

$15,513.28 x
Year 10 $775.66 $16,288.95
5%

Let's look at how we can calculate the year 10

figure using our formula. Remember that our
initial savings balance is $10,000, earning 5%
interest per year. Our compounding in this case
is yearly (interest compounded once per year).

Our formula: A = P(1+r/n)(nt)

P = 10000.

r = 5/100 = 0.05 (decimal).

n = 1.

t = 10.

If we plug those figures into the formula, we get

the following:

A = 10000 (1 + 0.05 / 1) (1
× 10) = 16288.95

So, the balance after 10 years is $16,288.95.

Our total interest earned is therefore $6,288.95.

Compounding with additional deposits

If you get into a pattern of making regular

deposits into your savings, the power of
compound interest can help you achieve even
higher interest rewards. Looking back at the
example above, if we were to contribute an
additional $100 per month into our investment,
our balance after 10 years would hit the heights
of $31,725, with interest of $9,725 on total
deposits of $22,000.

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Compound interest chart

The power of compound interest really becomes

apparent when you look at a chart of long-term
growth. Here's an example chart. You invest
your profit margin from a sale of an item
($1,000). We'll use a longer compounding
investment period (20 years) at 10% per year, to
keep the sum simple. As we compare the
benefits of compound interest versus standard
interest and no interest at all, it's clear to see
how compound interest can really give a boost
to your savings.

FAQ

Some frequently asked questions about

calculating interest and my savings calculators.

When is interest compounded?

With savings accounts, interest can be

compounded at either the start or the end of the
compounding period. If additional deposits or
withdrawals are included in your calculation, you
have the option to include them either at the
start or end of each period.

Daily, monthly or yearly interest

compounding

Our compound interest calculator includes

options for:

daily compounding

monthly compounding

quarterly compounding

half yearly and yearly compounding

monthly, quarterly and yearly deposits and

withdrawals

negative interest rates

inflation increases

Your savings account may vary on this, so you

may wish to check with your bank or financial
institution to find out which frequency they
compound your interest at. Our compound
interest calculator allows you to enter a negative
interest rate, should you wish. If you need to
work out the interest due on a loan, you can use
the loan calculator.

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What is the effective annual interest

rate?

The effective annual rate is the rate of interest

that you actually receive on your savings after
inclusion of compounding. When compounding
of interest takes place, the effective annual
rate becomes higher than the nominal annual
interest rate.. The more times the interest is
compounded within the year, the higher the
effective annual rate will be.

Further reading

You can learn more about the power of interest

compounding in our article, what is compound
interest?

Calculator created by Alastair Hazell

and reviewed by James Whittington.

Calculator references:

1. Edward Hubbard, Percival Matthews & Anya Samek (2016)

Using online compound interest tools to improve financial
literacy, The Journal of Economic Education, 47:2, 106-
120, DOI: 10.1080/00220485.2016.1146097

2. The emergence of compound interest, British Actuarial

Journal, 2019

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