Enter a starting amount, an annual rate, how often interest compounds, and the number of years. The calculator returns the final balance and how much of it is interest, so you can see exactly what time does to money.
How it is calculated
A = P × (1 + r ÷ n)^(n × t)
A is the final amount after interest.
P is the starting principal.
r is the annual interest rate as a decimal, so 5% is 0.05.
n is how many times interest compounds per year — 12 for monthly, 4 for quarterly, 1 for yearly.
t is the time in years.
Total interest earned or owed is A − P.
Example
Put 100,000 THB into an account paying 5% per year, compounded monthly, and leave it for 3 years. Then A = 100,000 × (1 + 0.05 ÷ 12)^36 = 116,147.22 THB, of which 16,147.22 THB is interest.
With simple interest at the same rate you would earn 100,000 × 0.05 × 3 = 15,000 THB. The extra 1,147.22 THB is the compounding effect — modest over 3 years, but it accelerates the longer the money sits.
Understanding your result
For savings, the final amount shows what patience earns; compare different compounding frequencies before choosing where to keep the money.
For debt, the same math works against you. If a loan you owe compounds, an unpaid balance grows even when no new borrowing happens — a strong reason to agree on a written repayment plan early instead of letting interest stack.
If a private loan is meant to use compound interest, spell out the compounding frequency in the agreement. “5% per year, compounded monthly” and “5% per year, simple” are different debts.
Frequently asked questions
What is the difference between compound and simple interest?
Simple interest is charged only on the original principal, so it grows in a straight line. Compound interest is charged on the principal plus accumulated interest, so it grows faster and faster. Over short periods the difference is small; over many years it becomes large.
Does compounding frequency really matter?
Yes, though the effect is smaller than most people expect. 100,000 THB at 5% for 3 years grows to 115,762.50 THB compounded yearly versus 116,147.22 THB compounded monthly. More frequent compounding always gives a slightly higher result at the same nominal rate.
Can I use this calculator for a loan instead of savings?
Yes. If you borrow at a compounding rate and make no payments, the result shows what you will owe. Most installment loans do not work this way, because each payment clears that period's interest — compounding on loans mainly matters when payments are missed or deferred.
Do informal loans between people usually compound?
Usually not — informal lending is typically quoted as simple interest, like 2% per month on the original amount. Charging interest on interest in private loans is restricted or regulated in some countries, so check local rules and state the method clearly in any written agreement.
How do I compare a monthly rate to an annual rate fairly?
Convert both to an effective annual rate. A rate of 1% per month compounded is (1.01)^12 − 1 = 12.68% per year, not 12%. Comparing effective annual rates puts every offer on the same footing.
What is the rule of 72?
A quick mental shortcut: divide 72 by the annual interest rate to estimate how many years money takes to double. At 6% per year, that is roughly 72 ÷ 6 = 12 years. It is an approximation, but a useful sanity check on the calculator's output.
Results are estimates for general information only and may differ from a lender's exact figures. They are not financial or legal advice.