Interest Rate Calculator
See how regular monthly contributions and compound interest grow your savings balance over 1 to 30 years.
Calculate compound interest growth, effective annual rate (AER/APY), and total returns over time with periodic contributions.
See also: Payment Calculator, Refinance Calculator, Home Loan Calculator
How it is calculated
Future Value = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) ÷ (r/n)]
Worked example: $10,000 Invested for 10 Years with $200 Monthly Additions at 6% Rate
$10,000 initial principal, $200 monthly contribution, 10-year horizon, 6% annual interest compounded monthly.
- Compound initial deposit: $10,000 × (1 + 0.06/12)^120 = $18,193.97.
- Compound regular monthly additions: $200 × [((1 + 0.005)^120 − 1) ÷ 0.005] = $32,775.87.
- Sum total balance: $18,193.97 + $32,775.87 = $50,969.84.
- Calculate total cash deposited: $10,000 + ($200 × 120) = $34,000.
- Calculate interest gained: $50,969.84 − $34,000 = $16,969.84 pure interest growth.
$50,969.84 final balance with $16,969.84 in compound growth.
How to Use This Calculator (Step-by-Step)
- Enter your current starting balance or opening deposit.
- Specify your anticipated annual interest rate (AER/APR).
- Choose your investment timeframe in years.
- Enter any regular monthly contributions you intend to add.
- Select compounding frequency (monthly or daily compounding produces the highest return).
Frequently asked questions
What is the Rule of 72?
The Rule of 72 is a mental shortcut to estimate how many years it takes for your money to double at a fixed annual rate: divide 72 by the annual interest rate (e.g., at 6%, your money doubles in ~12 years).
What is the difference between APR and APY?
APR is the nominal stated rate without compounding. APY (Annual Percentage Yield) reflects the actual interest earned in one year when compounding is included.
Does compounding monthly or daily give a higher return than annually?
Yes, in general. The formula compounds the rate divided by the frequency, raised to the frequency multiplied by the years, so more frequent compounding lets interest start earning interest sooner. The how-to steps note that monthly or daily compounding produces the highest return among the options offered.
What happens if I add no monthly deposit?
The monthly addition input accepts zero, so the result then reflects only the compounding of the initial principal. The future value formula still applies, with the regular-contribution term contributing nothing.
Why does the balance grow faster in later years?
Compound interest pays on both the original principal and previously accumulated interest, so growth accelerates over time rather than staying flat. That is why the worked example gains 16,969.84 dollars of interest on 34,000 dollars deposited over ten years.
Are these results a guaranteed return?
No. The figures are mathematical estimates from the rate and timeframe you enter, not financial advice, and interest rates and account terms are subject to change. Treat the projection as a planning estimate and check the actual terms of any account.