Monthly compound interest calculator
Monthly compounding means interest is calculated and added to your balance once per month. Many mortgages, loans, and savings accounts use monthly compounding. Enter your principal, annual interest rate, and term to see your final balance, total interest earned, and a year-by-year breakdown table. All calculations run locally in your browser.
Compound frequency
Formula: A = P(1 + r/n)^(nt), where P = principal, r = annual rate, n = compounds/year, t = years
Calculations are estimates for informational purposes only. Consult a financial professional for advice.
| Year | Balance | Interest this year |
|---|---|---|
| 1 | 10,511.62 | 511.62 |
| 2 | 11,049.41 | 537.79 |
| 3 | 11,614.72 | 565.31 |
| 4 | 12,208.95 | 594.23 |
| 5 | 12,833.59 | 624.63 |
| 6 | 13,490.18 | 656.59 |
| 7 | 14,180.36 | 690.18 |
| 8 | 14,905.85 | 725.49 |
| 9 | 15,668.47 | 762.61 |
| 10 | 16,470.09 | 801.63 |
How it works
The compound interest formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate as a decimal, n is the number of compounding periods per year, and t is the number of years. The year-by-year table recalculates each row using this formula with increasing t values. All arithmetic runs in JavaScript in your browser.
Processing runs in your browser
All calculations happen locally in your browser tab. Our servers are not involved at any point.
Calculations are estimates for informational purposes only. Consult a financial professional for advice.
Related operations
For working out a quick percentage of a value, try the percentage calculator. To convert fractional rates into decimals, use the fraction calculator. To compare this growth with an investment's actual return, try the ROI calculator.
Frequently asked questions
- How is monthly compound interest calculated?
- Using A = P(1 + r/12)^(12t). The annual rate r is divided by 12 to get a monthly rate, then applied 12 times per year. For example, £5,000 at 4% for 5 years gives about £6,105.
- What types of accounts use monthly compounding?
- Most savings accounts, certificates of deposit (CDs), money market accounts, and many loans use monthly compounding. Mortgages also typically compound monthly, which affects the effective annual rate (EAR).
- What is the effective annual rate (EAR)?
- The EAR (also called APY) is the actual annual return after accounting for compounding. For 5% compounded monthly, EAR = (1 + 0.05/12)^12 − 1 ≈ 5.116%. This lets you compare accounts with different compounding frequencies.
- Can I add monthly deposits?
- The calculator models one starting amount with no further deposits or withdrawals, so the figure shows what a single lump sum grows to. For a savings plan with regular deposits, treat the result as the lump-sum part of the total.
Last reviewed September 30, 2026
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