Compound Interest Calculator
See how much your money grows when interest is reinvested over time. Compound interest is interest earned on both your original principal and the interest already earned.
How to use the Compound Interest Calculator
- Enter your inputs into the Compound Interest Calculator above.
- Results update instantly as you type — no submit button needed.
- Adjust any value to see how the result changes in real time.
The compound interest formula
A = P (1 + r/n)^(n·t)
P is the starting principal, r is the annual interest rate (as a decimal), n is the number of compounding periods per year, and t is the number of years. A is the final balance, including all compounded interest.
Worked example
$10,000 invested at 7% annual interest compounded monthly for 20 years: A = 10,000 × (1 + 0.07/12)^(12 × 20) ≈ $40,387. The same amount at simple interest would be only $24,000 — compounding adds over $16,000.
Frequently asked questions
How is compound interest different from simple interest?
Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus any interest already accumulated, which makes the balance grow faster over time.
Does compounding frequency matter?
Yes, but with diminishing returns. Daily compounding produces only slightly more than monthly at the same rate, but the difference between annual and monthly is significant over long periods.
What is the Rule of 72?
The Rule of 72 is a shortcut to estimate doubling time: divide 72 by the annual interest rate to get the approximate number of years for an investment to double. At 8%, money doubles in about 9 years.
Should I include regular contributions?
Yes — most calculators let you add a monthly or annual contribution. Regular contributions dramatically increase the final balance because each contribution starts compounding from the day it is added.