Compound Interest Calculator
Calculate compound interest growth over time.
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How to Use
- 1Enter principal, rate, compounding frequency and years.
- 2View the future value and total interest earned.
Features
- Multiple compounding frequencies
- Total interest earned breakdown
- Year-by-year growth
Example
Input
$1,000 at 5% for 10 years, compounded annually
Output
≈ $1,628.89
Calculate how an investment grows over time with compound interest, based on principal, rate, compounding frequency and duration.
Interest on interest
With compound interest, each period's interest is added to the balance, and the next period's interest is calculated on that larger amount. Over long periods this snowballs: the growth in later years is far bigger than in early years, even though the rate never changes. The calculator uses the standard formula A = P(1 + r/n)^(nt), where n is how many times per year interest is compounded.
Compounding frequency
Here is 10,000 at 8% a year for 10 years:
| Compounded | Final amount |
|---|---|
| Annually | 21,589.25 |
| Semi-annually | 21,911.23 |
| Quarterly | 22,080.40 |
| Monthly | 22,196.40 |
| Daily | 22,253.46 |
| Simple interest (no compounding) | 18,000.00 |
More frequent compounding helps, but the rate and time matter far more. The biggest gap in the table is between simple and compound interest, not between monthly and daily.
The rule of 72
To estimate how long it takes money to double, divide 72 by the annual rate. At 8% that is about 9 years; at 6%, about 12. It works just as well for debt: credit card debt at 24% doubles in about 3 years if left unpaid.
Keep expectations realistic
- Real investments do not grow at a steady rate; returns vary from year to year.
- Inflation reduces what the final amount can buy. Subtracting inflation from the rate gives a rough “real” return.
- Taxes and fees reduce the effective rate.
Compare with the Simple Interest Calculator to see how much of the growth comes from compounding alone. These figures are estimates, not financial advice.