Tukuk-OS🌱 Compound Interest
ℹ️ What this tool does & how it works
Interest on interest, computed the honest way: A = P(1+i)ᴺ for the lump sum plus the ordinary-annuity term C·((1+i)ᴺ−1)/i for savings deposited at each month-end. Every number below comes from those two closed forms — no simulation, no rounding drift — and the page shows the effective annual rate so monthly-compounded 5% is never confused with a flat 5%.
Nominal rate, effective rate, and why banks quote both
5% "compounded monthly" is not 5% a year — it is 5%/12 credited twelve times, which comes to (1+0.05/12)¹² − 1 = 5.116% effective. Advertised savings rates that mention the frequency are quoting the nominal number; the page above always shows both, because the comparison shoppers who win are the ones who compare effective rates. The doubling time is the same honesty: ln 2 / ln(1+i) periods, exact — the rule of 72 is shown next to it as the mental shortcut it is.