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Home / Compound interest / $1,000 for 5 years

$1,000 Compound Interest Over 5 Years

Use this page to follow one lump sum of $1,000 across 5 years. It starts at 6 percent a year. Change it to match your own.

The starting figures give a final balance of $1,349. Of that, $349 is interest.

$
$
%
years
%
Final balance
$1,349
Total you put in
$1,000
Interest earned
$349
Year by year
YearTotal put inBalance
1$1,000$1,062
2$1,000$1,127
3$1,000$1,197
4$1,000$1,270
5$1,000$1,349
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How the growth is worked out

The formula is the amount times one plus the monthly rate, raised to the power of 60. For $1,000 at 6 percent that means a monthly rate of 0.5 percent and 60 months of growth.

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Worked example

Put $1,000 away at 6 percent for 5 years with no further deposits. The balance grows to $1,349. Interest accounts for $349 of that.

Halfway through, at 2.5 years, the balance is $1,161. The second half of the time adds $187, which is more than the first half added.

Questions about this calculator

What is $1,349 worth after prices rise 2.5 percent a year?

If prices rise at 2.5 percent a year for 5 years the final balance has the buying power of about $1,192 in starting-year money. Enter your own inflation rate in the calculator to test other cases.

What if you added $100 a month to $1,000 over 5 years?

The balance would reach $8,326 instead of $1,349. The deposits would add $6,000.

What yearly return would double $1,000 in 5 years?

About 14.9 percent a year. That is the rate at which $1,000 reaches $2,000 by year 5.

Is a lump sum of $1,000 better than depositing it monthly over 5 years?

For growth, yes. $1,000 invested at the start reaches $1,349. The same money split into 60 equal monthly deposits reaches only $1,163 at 6 percent because most of it spends less time growing. Monthly deposits suit a budget while a lump sum suits cash you already have.

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This page is for education only and is not financial or tax advice.