How to use
- Start from the sample deposit, rate, and years; adjust to match your account.
- Pick a compounding frequency that mirrors your bank or credit union.
- Results refresh as you type; use "Copy URL" to save or share this scenario.
Calculated in your browser only; nothing is sent to a server.
How it’s calculated
1) Definitions
- P = today’s deposit (principal); r = annual rate (%); m = times interest is added per year; t = years
2) Assumptions
- Inputs must be positive numbers
3) Formulae
- FV = P × (1 + r/m)m×t
- EAR = (1 + r/m)m − 1
- Interest = FV − P
4) Example
P=$10,000, r=8%, m=12, t=1 → FV ≈ $10,830; interest ≈ $830.
FAQ
What do P, r, m, and t mean?
P is the money you deposit now (principal). r is the annual interest rate in percent. m is how many times interest is added in a year (12 monthly, 4 quarterly, 1 yearly). t is the time in years you keep the deposit.
What is the effective annual rate (EAR)?
EAR is the true yearly growth after compounding: EAR = (1 + r/m)m − 1. It lets you compare accounts with different compounding schedules.
Which compounding option should I pick?
Choose the same schedule your bank uses. Savings accounts are often monthly, some CDs are quarterly, and simple term deposits may be yearly. If your account compounds daily, monthly is a close approximation.