Compound interest calculator
Compound interest P x (1 + r/n)^(n x years) with annual, quarterly, monthly or daily compounding. 1,000,000 at 5% for 3 years: 1,161,472.23 monthly.
Uses the selected compounding frequency. Taxes and fees are not included.
Formula estimate only. Rates, taxes, and legal rules vary by jurisdiction.
What to know
The compound-interest page adds a Compounding select to the usual principal, annual rate and years. The formula is future value = principal x (1 + r / n)^(n x years), where n is 1 for annually, 4 for quarterly, 12 for monthly and 365 for daily.
Worked example: 1,000,000 at 5 percent for 3 years gives 1,157,625.00 with annual compounding, 1,160,754.52 quarterly, 1,161,472.23 monthly and 1,161,822.31 daily. More frequent compounding always helps, but with diminishing returns: daily adds only about 350 over monthly here.
The rate is the nominal annual rate. At 5 percent compounded monthly the effective annual yield is (1 + 0.05 / 12)^12 - 1 = 5.1162 percent. Quoting a product by its effective yield and comparing it with a nominal rate is a common source of confusion.
The summary lists the estimated value, the principal and the interest earned. The default selection is monthly. Taxes, fees, deposits and withdrawals are not modelled, so use the savings page when you add money regularly.
Time matters more than frequency. At 5 percent compounded monthly, 1,000,000 grows to 1,283,358.68 after 5 years, 1,647,009.50 after 10 years and 2,712,640.29 after 20 years, so each extra decade multiplies the balance by roughly 1.65.
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How to use Compound interest calculator
- Enter Principal / amount 1,000,000, Annual rate 5 and Years 3.
- Open Compounding and choose Monthly.
- Read the Estimated value, which shows 1,161,472.23.
- Switch to Annually to see 1,157,625 and compare the Interest earned lines.
Quick answers
How long does it take for money to double at 7 percent?
About 10.2 years with annual compounding, since 1.07^10.24 is roughly 2. Test it by entering 10 years and reading the 1.967 multiple.
What is the effective annual yield at 5 percent compounded monthly?
5.1162 percent. That is why 1,000,000 grows to 1,051,161.90 in one year.
Why choose daily compounding if the difference is small?
Some accounts really do compound daily. The option lets you match the product terms, using 365 periods per year.