GreatCalc
العربية

Compound Interest Calculator

See how a balance grows with compound interest and optional monthly deposits, with a year-by-year table.

Enter the values to see the result here.

Formula

For principal PP, annual rate rr, nn compounding periods per year and tt years:

A=P(1+rn)ntA = P\left(1 + \frac{r}{n}\right)^{nt}

Monthly deposits DD use the equivalent monthly rate i=(1+r/n)n/12−1i = (1 + r/n)^{n/12} - 1 and the future value of an annuity:

Adeposits=D⋅(1+i)12t−1iA_{\text{deposits}} = D \cdot \frac{(1 + i)^{12t} - 1}{i}

The final balance is the sum of the two parts. At a zero rate the second part is simply 12tD12tD.

Worked example

Start with 10,000, deposit 200 a month, 6% a year compounded monthly, for 10 years.

  • Lump sum: 10,000×(1.005)120≈18,193.9710{,}000 \times (1.005)^{120} \approx 18{,}193.97.
  • Monthly rate i=0.005i = 0.005; deposits: 200×1.005120−10.005≈32,775.87200 \times \frac{1.005^{120} - 1}{0.005} \approx 32{,}775.87.
  • Final balance about 50,969.84.
  • Money you put in: 10,000+200×120=34,00010{,}000 + 200 \times 120 = 34{,}000, so interest earned is about 16,969.84.

Common mistakes

  • Entering 6 as 0.06 or 0.6. The rate field takes a percentage.
  • Expecting the result to be spendable today. Inflation of 3% a year halves purchasing power in about 24 years.
  • Comparing a nominal rate compounded monthly with an effective annual rate without converting.
  • Stopping deposits mid-way and reusing the same total. Run the calculation in two stages instead.

Frequently asked questions

How much does compounding frequency matter?

Less than people expect. 10,000 at 6% for 10 years becomes 17,908 compounded annually and 18,194 compounded monthly. Daily compounding adds only about 26 more. Time and rate matter far more.

Is compound interest allowed in Islamic finance?

Interest (riba) is prohibited under most Islamic rulings. The same math describes the growth of a profit rate in halal investments such as sukuk or a profit-sharing account, so use the rate as an expected annual return, not as interest.

How are monthly deposits treated?

Each deposit is made at the end of its month and then earns the rate for the remaining months. The calculator converts the compounding frequency into an equivalent monthly rate so annual, quarterly and daily settings all stay consistent with deposits.

Why is my result different from my bank's?

Banks may compound on different dates, use 360-day years, round each period, or change the rate. This tool shows the clean mathematical result.

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