Compound Interest Calculator
See how savings grow with compound interest and regular contributions.
Enter a starting amount, an annual rate, and a time horizon to see how compound interest grows your money — with an optional monthly contribution. You'll get the final balance, the total interest earned, and a year-by-year breakdown with a growth chart.
Compounding is the engine of long-term saving: you earn interest on your interest, so balances grow faster the longer you leave them and the more often interest compounds.
📖 Read the guide: Compound Interest Explained: Formula, Examples, and the Rule of 72
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Formula
Compound interest
A = P(1 + r/n)^(nt)
P = principal, r = annual rate (decimal), n = compounds per year, t = years. Example: $1,000 at 10% for 1 year, compounded monthly ≈ $1,104.71.
With regular contributions
+ PMT added each period and compounded thereafter
Each contribution is added to the balance and earns interest for the rest of the term.
How to use the compound interest calculator
- 1Enter your starting amount (principal), the annual interest rate, and the number of years.
- 2Pick how often interest compounds, and add an optional monthly contribution.
- 3Read the final balance, total interest, and contributions; explore the year-by-year table and chart.
Examples
| Example | Input | Result |
|---|---|---|
| One year | $1,000 · 10% · annually | $1,100 |
| Monthly compounding | $1,000 · 10% · monthly | $1,104.71 |
| Long term | $1,000 · 7% · 30 yrs | ≈ $7,612 |
What is compound interest?
Compound interest is interest calculated on both your original principal and the interest already added. Unlike simple interest (which is only ever a percentage of the principal), compounding makes the balance grow by larger and larger amounts each period — an effect that becomes dramatic over long horizons.
Regular contributions amplify this further. Adding a fixed amount each month means more principal earning interest over time, which is why steady investing tends to outperform a single large deposit left untouched.
Compounding frequency
The more often interest compounds, the more you earn, because interest starts earning its own interest sooner. Daily compounding edges out monthly, which beats annual — though the differences are modest at typical rates. This calculator lets you compare annual, semi-annual, quarterly, monthly, and daily compounding.
The Rule of 72
A handy mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes for money to double. At 8%, that's about 9 years; at 6%, about 12. It's an approximation, but a remarkably good one for everyday rates.
This tool provides estimates for educational purposes only and is not financial advice. Investment returns are not guaranteed — consult a qualified financial professional before making decisions.
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate as a decimal, n is the number of compounds per year, and t is the number of years.
How often should interest compound?
More frequent compounding earns slightly more — daily beats monthly beats annual — but the difference is small at normal rates. The rate and time horizon matter far more.
What's the difference between compound and simple interest?
Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus accumulated interest, so it grows faster over time.
What return should I assume for long-term projections?
There's no guaranteed figure. Historically, broad stock-market returns have averaged roughly 7% after inflation, but actual results vary widely — treat any projection as an estimate, not a promise.
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