# Compound Interest Calculator

This compound interest calculator calculates interest between any two dates. A dozen compounding frequencies are supported (did we miss any? :). You can also enter negative interest rates.

Because this calculator is date sensitive, and because it supports many compounding options, it is a suitable tool for **calculating the compound interest owed on a debt** when the debtor has not made any payments or from a point in time when the balance is known. *More details below the calculator*

#### Info...

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## Compound Interest

Compound interest means that interest gets paid (or is earned) on previously paid interest.

For example, if the interest rate is 2% and you start with $1,000 after the end of a year, you'll earn or owe $20 in interest (using annual compounding). Then at the end of two years, assuming there have been no withdrawals (or payments) you earn $20.40, not $20. The previous interest earns interest as well.

This pattern is called compounding, and it repeats as long as the money stays invested, or the debt is owed.

If you are an investor, you want to compound interest. If you are a debtor, you want to avoid it, particularly if you ever miss a payment or a payment is not enough to cover the interest due.

You can use this online interest calculator as a:

- loan interest calculator
- savings interest calculator
- daily interest calculator
- negative interest calculator
- investment interest calculator

As a side benefit to this calculator's date accuracy, you can use it for date math calculations. That is, given two dates, it will calculate the number of days between them or it will find the date that is "X" days from the first date.

## Compound Interest Calculator Help

Enter an amount and a nominal annual interest rate.

Date Math: If you change either date, days between dates will be calculated. If you enter a positive number of days, the end date will be updated. If you enter a negative number of days the start date will be updated.

The above means you can calculate interest for a specific number of days and not worry about what the dates are. If you need to know the interest for 31 days, then enter 31 for the number of days and don't worry about the dates.

Set the compounding and days-in-year. Click "Calc". Interest and future value are calculated (FV is starting amount plus the interest.) **Annual percentage yield** is used for comparing investments. It is the rate institutions must quote in the US for interest bearing accounts. The holder of such an account can use the *APY* to compare different accounts.

Interest may be calculated based on a unit of time, say a month. This is known as "**Periodic Interest**" In that case, a month's interest is always the same for the same interest rate and same principal balance regardless of the length of the month. Given $10,000 principal and an interest rate of 6.75% the interest will be the same for February as it is for March. Note if you select a periodic method such as "weekly", "biweekly" etc., and if the dates enter do not equate to a number of full periods, then interest will be calculated for the fractional period by counting the days and calculating simple interest. This generally results in 1/2 a month's interest being less than 1/2 of a full month's interest when using monthly compounding.

There is also "**exact day interest**". Interest is calculated based on the number of days. In this case, the amount of interest will be different for February and March. Set compounding to "continuous", "daily" or "simple" for daily interest calculations.

## Larry Harrison says:

I was able to download the application to my I-phone. However, it will not let me “Compounding” field to “Daily”. It is frozen. All other fields will accept input/changes. The box will not drop down box on my phone as it will on my office computer. .

## Karl says:

Hi Larry, I assume you mean open the calculator in your iPhone browser? There’s nothing to download.

I actually have an iPhone and I just tried this calculator and I faced no issues setting the compounding to daily. The iPhone will put a list at the bottom of the screen when you touch the dropdown box. Select daily from that list.

Are you running a version of iOS 12?

## Larry Hartisin says:

Compounding is the only field I can’t change . The drop down will not change and leaves only “Exact/Simple” in that box.

I entered your website on my phone and it went to that site.

## Karl says:

I’m sorry you’re experiencing a problem. It’s hard to say what’s going on. I’m using Safari on an iPhone X and I can’t duplicate the problem. If you’re holding the phone in portrait orientation, can you try flipping it to landscape just to set this one option? It might work if the dropdown is farther from the edge of the phone. It may detect the finger easer. But obviously, this is just a guess.

## Karl says:

Hi Ben, thank you. I’m glad you discovered them.

This is definitely the right calculator, but I’m not sure I understand all your numbers and without knowing how you entered them, it hard to say why you are getting the results you are getting.

$234.59 twice monthly + $750 once a month comes to $1219 paid each month. Half of that is $609.50. I don’t know where the $492 is coming from

How are you solving for the term?

If I set compounding to twice monthly and payment to twice monthly and use $492.95 the loan is paid off in 65 payments. Is that what you got? This requires just 2 rows being entered into the calculator and setting # Periods on the 2nd row (payments) to "Unknown".

## John says:

Does the ‘Interest Earned’ calculation use rounding?

I was trying an exercise creating an Excel spreadsheet. I used your financial calculator as a comparison using the following variables:

-entered start date 15 May 2018

-entered end date 15 May 2019

-‘365 days calculated’

-entered PV of $1500

-entered Annual Interest Rate 15%, (but I used your daily calculation of 0.0411%.)

Your calculator said $225 Interest Earned, but my spreadsheet calculated $225.02

Thanks for your help.

## Karl says:

All calculators that display a float, will round. So yes, this calculator rounds.

But the calculated interest is accurate to the penny. It just so happens that the interest for the year is an even $225.

So, what’s going on? The rounding is happening where you aren’t expecting it. The daily interest rate is not actually 0.0411%.

I did not realize the someone might want to use the daily interest rate shown here for calculating purposes. The next time I make a change to this page, I’ll look into increasing the number of digits shown for the daily rate so that user’s hand calculations can be accurate to the penny too!

## Nancy says:

There are default START & END date YEAR errors. Default start used to be current mo/day/yr with default end date 1 year later.

Current START DATE defaults to 2018 vs 2019 & END DATE defaults to current mo/day/yr vs 2020.

Can you please fix this?

## Karl says:

I understand, and I though that was the way it did work, but I went back to a version from August 2017, and it used the same defaults as today.

The thinking is, if I owe interest or I am owed interest as of

today, what is the amount owed? To answer that question, all one has to do is to set the first date.But you obviously are doing forward looking calculations, which means you need to reset both dates. If I change it though, someone else isn’t going to be happy. I will look at seeing if I can add a "Today" option on the calendar so that all a user need to is click once to set to current date.