Crypto Compound Interest Calculator
Calculator inputs explained
To calculate compound interest in the CryptoPitcher.com calculator, you need to fill in four fields: initial deposit, number of periods, return per period, and additional deposits per period:
- Initial deposit. The amount at the time of opening the account;
- Number of periods. The frequency of payments according to the terms of the program: year, quarter, month, week, day;
- Yield per period. The amount of regular payments (per year, quarter, month, week, day);
- Additional payments (reinvestment). This is an additional amount that can be added to the main deposit. Filling in this field is optional.
After entering the data, the calculator will show a detailed calculation of payments for each period in the form of a list.
What is compound interest?
Compound interest in investments is a system of calculating profit based on income from the previous period (reinvestment). With each subsequent recalculation, the deposit amount increases. In such a system, with the same interest rate, the more recalculation periods there are, the higher the final return on investment.
How does crypto compound interest work?
Compound interest in cryptocurrency works on the principle of accruing income on the current deposit amount, taking into account previously received payments. After each recalculation, the total amount from which the profit is accrued increases.
Compound interest income is calculated using the following formula:
A = P × (1 + r/n)nt
- A = total payment amount (deposit + profit);
- P = initial deposit amount;
- r = annual rate (converted to a decimal, e.g., 5% → 0.05);
- n = number of profit accruals per year. For daily accrual, the value will be 365, for monthly accrual — 12, for annual accrual — 1;
- t = term of the deposit in years.
What is the annual percentage rate (APR) in crypto?
The annual percentage rate (APR) is a system for calculating interest based on the initial deposit. The APR rate is fixed at the time the account is opened and this value does not change throughout the entire period of the program. This system is often used in traditional finance (bank deposits).
The following formula is used to calculate APR income:
A = P × (1 + R × T)
- A = total payment amount;
- P = initial deposit amount;
- R = APR rate (converted to a decimal fraction);
- T = cycle time (in years).
What is the difference between APR and APY?
APR and APY differ only in the method of calculation. APR is a simple method where interest is calculated on the initial deposit amount. APY is a compound interest method where the recalculation is based on the last total amount, taking into account previous payments.
How to earn interest through staking crypto
Staking is a passive way to earn cryptocurrency that works on the Proof-of-Stake (PoS) consensus algorithm. The user freezes a certain amount of coins in a crypto wallet (account) and receives a reward in the form of network currency. To earn money, you need to select the Stake section in the crypto wallet or exchange menu and transfer a certain amount of coins to staking. After that, the user will be credited with a reward for each period (hour, day, month) according to the terms of the program.
The approximate income from staking can be calculated using a compound interest calculator by day, specifying the deposit amount, number of payments, and yield (APR/APY).
