Compound Interest Calculator Daily, Monthly, Quarterly, or Annual

Just enter your beginning balance, the regular deposit amount at any specified interval, the interest rate, compounding interval, and the number of years you expect to allow your investment to grow. This flexibility allows you to calculate and compare the expected interest earnings on various investment scenarios so that you know if an 8% return, compounded daily is better than a 9% return, compounded annually. In the above calculator when recurring account contributions are made, money is added or subtracted at the beginning of each week. If you would like to end money at the end of each week then you would subtract the regular contribution amount from the initial savings to calculate interest at the end of the week. Use this calculator to quickly figure out how much money you will have saved up during a set investment period. First, enter your initial amount you have set aside, then enter the interest rate along with how long you intend to invest for.

Calculation Mechanics

Credit card companies and other lenders also use compound interest to calculate your debt. Most credit card companies compound interest daily by adding the interest you owe to your principal balance. Compound interest can also work against you when you have to pay it.

Compound interest terms & definitions

NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. When interest compounding takes place, the effective annual rate becomes higher than the nominal annual interest rate. The more times theinterest is compounded within the year, the higher the effective annual interest rate will be. Looking back at our example from above, if we were to contribute an additional $100 per month into our investment,our balance after 20 years would hit the heights of $67,121, with interest of $33,121 on total deposits of $34,000.

1. The more frequently a bank compounds your interest, the faster your money will grow.
2. When interest compounding takes place, the effective annual rate becomes higher than the nominal annual interest rate.
3. If this calculation is for a lump sum deposit with no recurring transactions enter “Never” in the “add money” drop down.
4. This book teaches you how retirement planning really works before it’s too late.

Our flagship wealth planning course teaches you how to secure your financial future with certainty. Compound interest is the interest you earn on your original money and on the interest that keeps accumulating. We believe everyone should be able to make financial decisions with confidence. Within our compound interest calculator results section, you will see either a Rate of Return (RoR) or Time-Weighted Return (TWR) figure for your calculation.

Retirement Calculator Secrets

To use the compound interest calculator, enter the following information and select Calculate. Future Value – The value of your account, including interest earned, after the number of years to grow. When it comes to retirement planning, there are only 4 paths you can choose.

This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. As a final note, many of the features in my compound interest calculator have come as a result of user feedback.

We’ve discussed what compound interest is and how it is calculated. So, let’s now break down interest compounding by year,using a more realistic example scenario. We’ll say you have $10,000 what does an accountant do roles responsibilities and trends in a savings account earning 5% interest per year, withannual compounding. We’ll assume you intend to leave the investment untouched for 20 years. Most checking accounts from big banks don’t earn interest, but several credit unions and online banks offer checking accounts that accrue compound interest. Compare the best high-yield checking accounts to see what APYs you could earn.