Quarterly Compound Interest Calculator
Project savings growth with quarterly capitalization. Compare reinvesting versus withdrawing interest over timelines up to 100 years.
About
Quarterly compounding is the standard for many high-yield savings accounts and Certificates of Deposit (CDs). Unlike annual compounding, interest is calculated and added to the principal every three months. Over long horizons, this frequency creates a distinct deviation between the nominal rate and the effective annual yield.
Bank products often advertise an Annual Percentage Yield (APY) that assumes full reinvestment. However, retirees or income-focused investors often withdraw these quarterly payments. This tool isolates the mechanical difference between those two strategies. It projects the exact future value when interest remains in the account versus the total payout when interest is stripped as cash flow.
Formulas
The core calculation relies on the standard compound interest formula with the compounding frequency fixed at 4.
Where:
- A = Future Value (Reinvested)
- P = Principal Investment
- r = Annual Interest Rate (decimal)
- t = Time in Years
For the withdrawal scenario (Simple Interest), the total interest is calculated linearly:
Reference Data
| Term (Years) | Principal ($) | Rate (%) | Compound Frequency | Future Value (Reinvested) | Total Interest (Reinvested) | Total Interest (Withdrawn) |
|---|---|---|---|---|---|---|
| 1 | 10,000 | 5.0 | Quarterly | 10,509.45 | 509.45 | 500.00 |
| 5 | 10,000 | 5.0 | Quarterly | 12,820.37 | 2,820.37 | 2,500.00 |
| 10 | 10,000 | 5.0 | Quarterly | 16,436.19 | 6,436.19 | 5,000.00 |
| 20 | 10,000 | 5.0 | Quarterly | 27,014.85 | 17,014.85 | 10,000.00 |
| 30 | 10,000 | 5.0 | Quarterly | 44,402.13 | 34,402.13 | 15,000.00 |
| 10 | 50,000 | 4.25 | Quarterly | 76,267.56 | 26,267.56 | 21,250.00 |
| 10 | 100,000 | 3.0 | Quarterly | 134,818.18 | 34,818.18 | 30,000.00 |
| 15 | 10,000 | 7.0 | Quarterly | 28,318.16 | 18,318.16 | 10,500.00 |