Compound Interest Calculator
Calculate the growth of your crypto investments
Understand how compound interest can grow your crypto investments over time. Perfect for DeFi staking, lending protocols, and long-term holding strategies.
Use this calculator to see how your investments grow through compound interest. Whether you're staking ETH, lending stablecoins, or planning long-term positions - understand the mathematics behind your returns.
Frequently Asked Questions
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, where you only earn returns on your original investment, compound interest allows your earnings to generate additional earnings.
In crypto, this concept applies to staking rewards, lending interest, and liquidity pool returns that are automatically reinvested.
The key to benefiting from compound interest is reinvesting your earnings. In DeFi protocols like Aave or Compound, interest is often automatically compounded. When staking, you can manually restake your rewards. The more frequently interest compounds, the faster your investment grows.
Even small additional returns become significant over longer time periods through the compounding effect.
APY represents the real rate of return on an investment over one year, taking into account the effect of compounding interest. Unlike APR (Annual Percentage Rate), which doesn't consider compounding, APY shows you the actual yield you'll receive.
For example: A 10% APR compounded daily results in approximately 10.52% APY.
The compound interest formula is: Final Amount = Principal × (1 + Interest Rate)^Time
For more complex scenarios with regular deposits or varying interest rates, the calculation becomes more involved. That's where this calculator helps - it handles the mathematical complexity for you, including different compounding frequencies and additional contributions.
In crypto, compound interest applies whenever you reinvest earnings. This includes:
- Automated DeFi lending protocols (Aave, Compound)
- Staking with auto-compounding
- Liquidity pool returns that are reinvested
- Yield farming strategies with automatic reinvestment
The compounding happens as frequently as the protocol calculates and distributes rewards - this can be per block, daily, or at other intervals.
In DeFi, interest rates are typically shown as annual rates (APR or APY) but calculated much more frequently - often per Ethereum block (approximately every 12 seconds) or daily.
When using traditional finance terms: if you see a "monthly rate," multiply by 12 for the annual rate. However, in crypto, most platforms display annual rates to make comparison easier.
This depends entirely on:
- The interest rate (varies by protocol and asset)
- The compounding frequency
- The time period
- Whether you make additional deposits
Example: 10,000 EUR at 5% APY compounded daily for one year ≈ 10,512 EUR (512 EUR profit). At 10% APY ≈ 11,052 EUR (1,052 EUR profit).
Use the calculator above to explore different scenarios with your specific parameters.