Compound Interest Calculator
See exactly how your savings or investments grow over time — including monthly contributions, a year-by-year breakdown, and how compounding compares to simple interest.
Estimates assume a constant rate of return — actual investment returns vary year to year.
How to Use the Compound Interest Calculator
A few numbers reveal the full growth curve of your money.
Enter your starting amount
This is your principal — the initial lump sum you're investing or saving today.
Add a monthly contribution
Include how much you plan to add each month — even small regular contributions compound significantly over time.
Set rate, frequency & years
Enter your expected annual return, how often interest compounds, and your investment timeline to see the full growth breakdown.
What Is Compound Interest?
Compound interest is interest calculated on both your original principal and the interest you've already earned — which is why money grows faster over time than with simple interest.
📐 The compound interest formula
A = P(1 + r/n)nt — where A is the final amount, P is your principal, r is the annual rate, n is compounds per year, and t is the number of years. Regular contributions add an extra layer on top of this base formula.
🔁 Why compounding frequency matters less than you'd think
Moving from annual to daily compounding does increase returns, but modestly. The interest rate itself and — even more so — the number of years invested have a far bigger impact on your final balance.
Simple vs. Compound Interest
The same $10,000 at 7% annual interest, invested for 20 years — no additional contributions.
| Year | Simple Interest | Compound Interest (Annual) |
|---|---|---|
| 5 years | $13,500 | $14,026 |
| 10 years | $17,000 | $19,672 |
| 15 years | $20,500 | $27,590 |
| 20 years | $24,000 | $38,697 |
Simple interest grows by a fixed amount every year. Compound interest grows on an increasingly larger base — the gap widens dramatically the longer money stays invested.
Tips for Maximizing Compound Growth
Small habits that make compounding work harder for you.
✅ Making compounding work for you
- Start as early as possible — time invested matters more than the amount
- Automate monthly contributions so growth compounds consistently
- Reinvest interest and dividends instead of withdrawing them
⚠️ Common mistakes
- Waiting to invest "until you have more" instead of starting small now
- Underestimating how much regular contributions add up over decades
- Ignoring fees, which quietly reduce your effective compounding rate
Frequently Asked Questions
Common questions about compound interest.
Compound interest is interest calculated on both the original principal and the interest that has already accumulated, meaning your money grows faster over time than with simple interest.
The standard formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times interest compounds per year, and t is the number of years.
It matters, but usually less than people expect. Moving from annual to monthly or daily compounding increases returns modestly; the interest rate and time invested have a much larger impact than compounding frequency alone.
The Rule of 72 is a quick way to estimate how long it takes an investment to double: divide 72 by the annual interest rate. At 8% annual growth, for example, an investment roughly doubles in about 9 years.