How to use
- Enter the initial amount, the annual interest rate and the number of years.
- Choose the compounding frequency.
- Add a regular monthly or yearly contribution, and whether it is added at the start or end of each period.
- Read the final balance and how much of it is interest, and check the yearly table.
Options explained
- Compounding
- How often interest is added to the balance. More frequent compounding earns slightly more — 5% compounded monthly is 5.12% a year.
- Start or end of period
- Money added at the start of each month earns interest for that month; money added at the end does not.
Examples
| Start | Rate | Years | Compounding | Final |
|---|---|---|---|---|
| 1,000 | 5% | 10 | Yearly | 1,628.89 |
| 1,000 | 5% | 10 | Monthly | 1,647.01 |
Frequently asked questions
What is compound interest?
Interest earned on both your original money and the interest already added. Over long periods it makes growth accelerate.
How is the doubling time calculated?
Exactly, as ln 2 divided by ln(1 + effective annual rate). The rule of 72 (72 ÷ rate) gives a close approximation.
Are taxes or inflation included?
No. Results are before tax and in today's money value. Subtract the inflation rate from the interest rate for a rough real return.
Privacy
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