Compound Interest Calculator
See the power of compound interest — often called the eighth wonder of the world. Enter your initial investment, monthly contribution, interest rate, and time horizon to watch your money grow. The calculator shows year-by-year breakdowns of your balance, total contributions, and total interest earned.
Compare different compounding frequencies (daily, monthly, quarterly, annually) to understand how each affects your returns. Even small differences compound dramatically over decades, which is why starting early matters more than investing large sums later.
Compound Interest Calculator
Calculate the growth of your investments over time with compound interest.
Learn More About Compound Interest
Frequently Asked Questions
How is compound interest calculated?
The future value formula is A = P(1 + r/n)^(nt), where P is the starting principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the number of years. $10,000 at 7% compounded monthly for 10 years grows to about $20,097.
What is the difference between simple and compound interest?
Simple interest is earned only on the original principal, while compound interest is earned on the principal plus previously earned interest. Over 20 years, $10,000 at 7% earns $14,000 with simple interest but about $28,700 with annual compounding — interest on interest is what makes long-term investing powerful.
How often should interest compound for the best return?
More frequent compounding earns slightly more: $10,000 at 5% for 10 years grows to $16,289 with annual compounding, $16,470 with monthly, and $16,487 with daily. The difference between monthly and daily is small — the rate and time horizon matter far more than the compounding frequency.
What is the Rule of 72?
The Rule of 72 is a quick estimate of how long it takes money to double: divide 72 by the annual return. At 8%, money doubles roughly every 9 years; at 6%, about every 12 years. It's an approximation that works best for rates between about 4% and 12%.