Compound Interest Calculator
See exactly how your money grows over time with the power of compounding. Enter your principal, interest rate, compounding frequency, and optional monthly contributions to calculate your future value.
How to use it
- Enter your initial investment (principal) amount.
- Enter the annual interest rate (e.g., 7 for 7%).
- Select how often interest compounds — monthly is most common for savings accounts.
- Enter the number of years you plan to invest.
- Optionally add a monthly contribution amount.
- Read your future value, total contributions, and total interest earned.
What Is Compound Interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, compounding accelerates growth because you earn interest on interest. Albert Einstein reportedly called it the eighth wonder of the world.
How Often Should Interest Compound?
The more frequently interest compounds, the more you earn. Daily compounding yields slightly more than monthly, which yields more than annual. For most savings accounts and CDs, monthly compounding is standard.
The formula
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency per year, and t is time in years.
How much does $10,000 grow at 7% compounded monthly for 10 years?
$10,000 at 7% compounded monthly for 10 years grows to approximately $20,097 — more than doubling your money.
What is the Rule of 72?
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 7%, your money doubles in roughly 10.3 years.
What is the difference between APR and APY?
APR is the stated rate before compounding. APY accounts for compounding and is always slightly higher than APR.
Does compound interest work for debt too?
Yes — credit card debt and loans also compound, which is why carrying a balance grows your debt quickly.