Compound interest calculator
Calculate compound interest: final value, interest earned and capital growth. Free calculator with monthly, quarterly and yearly compounding.
Compound interest is the most powerful force in saving: interest is earned on previously earned interest too. This calculator shows how much you will accumulate with monthly compounding and fixed monthly deposits. Enter your initial capital, annual interest rate, number of months, and monthly deposit. The calculator returns the final value, total amount paid in, earned interest, and the effective annual rate. It is a simple tool for planning deposits, savings accounts, and regular long-term investing.
Calculations: 1. r = annual_rate / 100 / 12 (monthly rate) 2. n = number_of_months 3. final_value = capital * (1+r)^n + deposit * ((1+r)^n - 1) / r 4. if r = 0: final_value = capital + deposit * n (linear) 5. paid_in = capital + deposit * n 6. interest = final_value - paid_in 7. effective_annual_rate = ((1+r)^12 - 1) * 100
Initial capital: PLN 5,000. Rate: 5% annual (0.4167% monthly). Period: 24 months. Deposit: PLN 200/month. Final value: PLN 10,561.89. Paid in: PLN 9,800. Interest: PLN 761.89. Effective annual rate: 5.12%.
It divides the annual rate by 12 and each month adds interest to a balance that grows with deposits and previously earned interest. The output is the final value, amount paid in, interest, and effective annual rate.
It is a mechanism where interest is earned not only on the capital but also on previously earned interest. The snowball effect grows with the length of the period and the frequency of compounding.
With monthly compounding interest is credited 12 times a year and starts working immediately. The effective annual yield is therefore higher than the nominal rate — for 5% it is about 5.12%.
The effective annual rate (EAR) is the real percentage yield over a year accounting for monthly compounding, calculated as (1 + monthly_rate)^12 - 1.
Each deposit increases the balance on which further interest accrues. Over a long horizon, regular deposits often have a greater impact on the final value than the initial capital alone.
No. It uses the gross rate. In Poland interest is reduced by a 19% capital gains tax. To get a net result, enter the after-tax rate, e.g. 4.05% instead of 5%.
No. The result is nominal. The real value of the accumulated amount will be lower if inflation exceeds the interest rate. Treat the values as indicative.
The calculator uses an ordinary annuity model — the deposit is made at the end of each month. With beginning-of-month deposits the actual result would be slightly higher.
Savings accounts usually offer 3-6% per year and term deposits 4-7%. Enter the rate of your product, or 0% to see the result without interest.
Yes — set the number of months (e.g. 240 for 20 years) and the expected rate. Note that stock market returns are variable while the calculator assumes a constant rate, so treat the result as an indicative scenario.
The calculator does not account for the Belka capital gains tax or inflation; the values shown are indicative. It assumes a constant rate and end-of-month deposits. Actual investment returns may differ.
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