Interest Calculator — Calculate Any Interest
Compound interest with periodic contributions, tax, and inflation adjustments.
- Principal
- Contributions
- Interest
| Year | Deposit | Interest | Balance |
|---|---|---|---|
| Year 1 | $5,000.00 | $1,534.86 | $31,534.86 |
| Year 2 | $5,000.00 | $1,869.19 | $38,404.05 |
| Year 3 | $5,000.00 | $2,220.63 | $45,624.68 |
| Year 4 | $5,000.00 | $2,590.05 | $53,214.74 |
| Year 5 | $5,000.00 | $2,978.38 | $61,193.11 |
Simple vs. compound interest
With simple interest, you earn (or pay) interest only on the original principal each period. With compound interest, interest is added to the balance and itself earns interest — so returns accelerate over time. The more frequently interest compounds, the faster it grows; continuous compounding is the mathematical limit.
The Rule of 72
For a quick mental estimate of how long it takes money to double, divide 72 by the interest rate. At 8% it takes about 72 ÷ 8 = 9 years. It's most accurate for rates between 6% and 10%, but works reasonably up to about 20%.
Fixed vs. floating rates
A fixed rate stays constant for the life of the loan or deposit. A floating rate tracks a benchmark (such as the Fed funds rate or SOFR) and changes over time — loan rates sit a bit above the benchmark, savings rates a bit below, with the spread as the bank's profit. This calculator uses fixed rates only.
Contributions
Adding money periodically accelerates growth substantially. Contributions made at the beginning of each period earn one extra compounding period compared with end-of-period deposits.
Tax and inflation
Interest income from bonds, savings, and CDs is often taxable; the tax rate reduces your effective return. Inflation erodes purchasing power, so the "buying power" figure shows what your ending balance is really worth in today's dollars.