How to use the interest calculator
- Enter the starting amount already in the account.
- Enter your regular contribution, choose whether it goes in every month or every year, and whether it is added at the start or end of each period.
- Enter the annual interest rate and how often it compounds.
- Enter the number of years.
- Optionally, add the tax rate you pay on interest and an inflation rate to see the balance in today's money.
The results show the end balance, the split between your money and interest, a chart of the balance each year and a year-by-year table.
How the interest is calculated
Here r is the annual rate as a decimal, k is the number of times it compounds a year (12 for monthly, 365 for daily) and p is how many contributions you make a year (12 or 1). When compounding is continuous, i = e^(r/p) − 1. Contributions made at the start of a period earn interest for that whole period; those made at the end start earning in the next one. If you enter a tax rate, that share of each year's interest is taken off at the end of the year, the way interest on a savings account is usually taxed once a year.
Worked example
The calculator starts with $20,000, plus $500 at the end of every month, at 5% compounded monthly for 10 years, with no tax and 3% inflation.
- Monthly rate: 0.05 ÷ 12 = 0.41667%. Over 120 months the growth factor is 1.0041667^120 = 1.647009.
- The starting amount grows to $20,000 × 1.647009 = $32,940.19.
- The contributions grow to $500 × (1.647009 − 1) ÷ 0.0041667 = $500 × 155.2823 = $77,641.14.
- End balance: $32,940.19 + $77,641.14 = $110,581.33.
You put in $20,000 + 120 × $500 = $80,000, so $30,581.33 is interest. At 3% inflation, $110,581.33 in ten years buys what $110,581.33 ÷ 1.03^10 = $82,282.89 buys today.
What changes the result most
| Change from the example | End balance |
|---|---|
| None (the example) | $110,581.33 |
| $6,000 once a year, at the start of each year | $112,700.14 |
| Compounding yearly instead of monthly | $109,759.47 |
| Compounding yearly and 25% tax on interest | $101,321.00 |
The yearly contribution beats the monthly one here because each $6,000 goes in at the start of the year and earns interest for all twelve months. Tax matters far more than compounding: switching from monthly to yearly compounding costs $821.86, while a 25% tax on each year's interest takes another $8,438.47 off the end balance.
Interest vs. compound interest calculators
This tool and the compound interest calculator use the same math. Use this one when you want yearly contributions, start-of-period deposits, tax or inflation; use the compound interest calculator for a quick monthly-contribution projection. For interest that never compounds, see the simple interest calculator, and to plan rising deposits over time, use the savings calculator.
Frequently asked questions
Does compounding frequency make a big difference?
Less than most people expect. At 5%, monthly compounding gives an effective yearly rate of 5.116%, and daily gives 5.127%. The rate itself, the time and the amount you add matter far more than how often interest is credited.
What tax rate should I enter?
Use your marginal income tax rate if the interest is taxed as ordinary income, as it is for most savings accounts and CDs in the US. Leave it blank for tax-advantaged accounts, such as an IRA or 401(k), where interest isn't taxed each year. The IRS page on interest income explains what counts.
Why show the value in today's money?
Prices rise over time, so a balance in ten years won't buy as much as the same number today. Dividing by the inflation factor shows what your future balance is really worth. Use 0% inflation to skip it.
Are contributions at the start or end of the period better?
Start-of-period contributions always end higher because each deposit earns one extra period of interest. Over ten years at 5% with monthly deposits, the difference is about $324 on $60,000 of contributions.
Related calculators
- Compound Interest Calculator — How a starting balance and monthly contributions grow, with any compounding frequency.
- Simple Interest Calculator — Interest on a principal at a flat annual rate for any number of years, months or days.
- Savings Calculator — How a savings account grows with regular deposits that rise each year, at your APY and after tax.
- Inflation Calculator — What money will cost in the future, and what today's savings will really be worth.
Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.