Compound Interest Calculator
Grows a single lump sum at a stated nominal annual rate with no contributions—ideal for comparing how often interest compounds.
Inputs
Future value:
Interest earned:
Effective annual yield (APY):
The compound interest formula
Future value = principal × (1 + rate/n)n×years, where n is the number of times interest compounds per year. Interest earned each period is added to the principal, so future interest is calculated on a growing balance — this is what separates compound interest from simple interest, which pays a flat amount on the original principal only.
Frequently asked questions
Does compounding frequency matter much? It matters, but usually less than the underlying rate or the time invested — going from annual to daily compounding typically adds a small fraction of a percent to your effective yield (APY), while a higher rate or a longer time horizon has a much bigger impact.
What's the difference between this and the Finance Calculator? This tool grows a single lump sum with no ongoing contributions. The Finance Calculator adds the ability to include regular monthly deposits on top of compounding growth.
Why is APY higher than my nominal rate? APY reflects the effect of compounding within the year — since interest is added to principal partway through the year and then itself earns interest, the effective annual return works out slightly higher than the simple nominal rate.