Crypto Compound Interest Calculator

Compound interest in crypto means earning returns not just on your initial principal but also on previously earned interest or rewards. When staking rewards or lending interest is automatically reinvested (compounded), your balance grows exponentially over time rather than linearly. Even a modest annual rate compounded frequently leads to significantly larger returns than simple interest.

A = P x (1 + r/n)^(n x t), where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the time in years. For continuous compounding: A = P x e^(r x t).

More frequent compounding produces higher returns at the same nominal rate. For example, $10,000 at 10% annual rate: annually grows to $11,000 after 1 year; monthly compounding yields $11,047.13; daily compounding yields $11,051.56. The difference compounds more dramatically over longer periods.

The rule of 72 is a quick approximation: divide 72 by the annual interest rate to estimate how many years it takes to double your investment with compound interest. For example, at 10% APY, 72 / 10 = 7.2 years to double. At 20% APY, it takes approximately 3.6 years.

In the United States, interest and staking rewards received are generally taxable as ordinary income at fair market value when received (IRS Revenue Ruling 2023-14 and Notice 2014-21). If you reinvest (compound) rewards, each reinvestment may create a new taxable event. Keep detailed records of each receipt date and value.