Compound Interest Calculator

The Compound Interest Calculator can be used to compare the interest rates of different compound periods. By definition, the APR is the interest rate compounded monthly and APY is the interest rate compounded annually.

Use the Interest Calculator to calculate the interest of your saving or investment.

input interest compound   output interest compound
% = 6.16778%


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APR v.s. APY

Annual Percentage Rate (APR) is normally used when you borrow money, such as mortgage loan. It is an annual interest rate without taking the compounding of interest within that year. For example, if a mortgage rate is 6% APR. It means, you will need to pay an interest of 6%/12 = 0.5% every month. So it is equivalent to paying (1+0.5%)12-1 = 6.168% annual rate. If you borrow $100, it means you will pay $6.168 interest 1 year later.

Annual Percentage Yield (APY) is normally used when you invest or save to the bank, such as CD. It is an annual interest rate with the compounding of interest within that year included. For example, if a CD rate is 6% APY and if you save $100, it means you will receive $6 interest 1 year later.

Compound Interest Formula


Simplified calculation
At = A0(1+r)t

where:
A0 : principal amount (initial investment)
At : amount after time t
r : annual interest rate
t : number of years


Multi-period per year compound
At = A0(1+r/n)nt

where:
A0 : principal amount (initial investment)
At : amount after time t
n : number of times the interest is compounded per year
r : annual nominal interest rate compound every 1/n year
t : number of years


Continuous compounding
At = A0ert

where:
A0 : principal amount (initial investment)
At : amount after time t
r : annual interest rate compound continuously
t : number of years