Compound Interest Calculator
Calculate compound and simple interest returns on savings accounts, fixed deposits (FDs), CDs, and investment portfolios with flexible compounding frequencies.
Step-by-Step Usage Guide
Project your investment growth and compounding returns in three easy steps:
Enter your initial starting capital and the expected annual interest percentage.
Choose the investment duration in years and optional recurring monthly additions.
Click “Calculate Returns” to inspect your final balance and total interest earned.
Simple vs. Compound Interest
Simple Interest calculates earnings strictly on the initial principal balance ($I = P \times r \times t$).
Compound Interest earns interest on both the initial principal and previously accumulated interest, accelerating portfolio growth exponentially over longer time horizons.
Common Banking Applications
- High-Yield Savings Accounts: Compounded daily and credited monthly to maximize liquidity.
- Certificates of Deposit (CDs): Fixed-rate growth locked over a specified multi-month or multi-year term.
- Fixed & Recurring Deposits: Predictable capital protection instruments common in global wealth planning.
Impact of Compounding Frequency ($10,000 at 7% over 10 Years)
| Compounding Schedule | Effective Formula | Total Interest Earned | Final Balance |
|---|---|---|---|
| Simple Interest | $I = P \times r \times t$ | $7,000.00 | $17,000.00 |
| Annual Compounding | $A = P(1 + r)^t$ | $9,671.51 | $19,671.51 |
| Monthly Compounding | $A = P(1 + r/12)^{12t}$ | $10,096.61 | $20,096.61 |
| Daily Compounding (365) | $A = P(1 + r/365)^{365t}$ | $10,137.53 | $20,137.53 |
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest calculates returns exclusively on your original starting deposit, while compound interest generates returns on both the principal and all accumulated interest from prior periods.
How does daily compounding differ from monthly compounding?
Daily compounding divides the annual rate by 365 days and reinvests earnings every day, producing a slightly higher effective annual yield (APY) than monthly compounding.
Are my financial numbers stored or shared with servers?
No. In accordance with our client-side privacy standard, all financial math is calculated locally inside your web browser. No figures are logged or sent across external networks.