Daily compound interest calculator

What is a daily compound interest calculator?

A daily compound interest calculator is a free online tool that shows how much an investment or balance grows when interest is added every single day. Instead of crediting interest once a year, each day’s interest is calculated on the running balance and immediately added back, so the next day earns interest on a slightly larger amount. You enter the starting principal, the annual interest rate, and the number of days, and the calculator returns both the final balance and the interest earned.

Formula

Daily compounding takes the annual rate, divides it across 365 days, and applies it once per day:

$A = P \left(1 + \frac{r/100}{365}\right)^{d}$

Where $P$ is the principal, $r$ is the annual interest rate in percent, and $d$ is the number of days. The interest earned is simply $A - P$.

How to use

1. Enter the principal amount you are starting with.
2. Enter the annual interest rate as a percentage.
3. Enter the number of days the money stays invested.
4. Read off the final amount and the interest earned, which update automatically once all three fields are filled.

Worked example

Suppose you invest a principal of 1000 at an annual rate of 5% for 365 days.

$A = 1000 \left(1 + \frac{0.05}{365}\right)^{365} = 1000 \times 1.0512675 \approx 1051.2675$

The final amount is about 1051.27, so the interest earned is $1051.2675 - 1000 \approx 51.2675$, roughly 51.27. Notice this is slightly more than the 50 you would get from simple interest over the same period, because each day’s interest itself earns interest.

FAQ

How is daily compounding different from annual compounding?

With daily compounding, interest is credited 365 times a year rather than once, so interest starts earning its own interest much sooner. Over a single year the difference is small, but it grows as the balance and the time frame increase.

Does this assume a 365-day year?

Yes. This calculator divides the annual rate by 365, which is the most common convention. If your account uses a 360-day year or counts leap days differently, the result may vary slightly.

Related tools: compound interest calculator and simple interest calculator.