Compound Interest Calculator

1. Enter your starting amount, the money you invest or deposit today.
2. Add the annual interest rate and the number of years.
3. Choose how often it compounds and read the final balance, interest and yield, all updating live.

Each output answers a different question:

Compound interest is interest calculated on your original amount plus all the interest already added. Unlike simple interest, which only ever pays on the starting sum, compounding pays interest on interest, so the balance grows faster the longer it runs. It is the single idea behind long-term investing and long-term debt alike.

The effect is small at first and dramatic later. A balance earning 7% a year barely moves in month one, but over decades the growth curve bends sharply upward as each year builds on a bigger base.

It applies the standard compound-interest formula, growing the principal by the periodic rate for every compounding period in the term.

In symbols the final balance is A = P(1 + r/n)^(nt) where P is the principal, r the annual rate as a decimal, n the number of compounding periods a year, and t the years. The effective annual yield is (1 + r/n)^n - 1.

1. Divide the annual rate by the number of periods a year.
2. Raise one plus that periodic rate to the total number of periods.
3. Multiply by the principal to get the final balance.

More frequent compounding raises the balance slightly, because interest starts earning interest sooner.

Invest 10,000 at 7 percent for 10 years, compounded monthly. The monthly rate is 0.07 / 12, and over 120 months the balance grows to 10000 * (1 + 0.07/12)^120 = 20,097.

So about 10,097 of that is interest, and the money has roughly doubled, matching the rule of thumb that 7 percent doubles capital in about a decade. Switch compounding to annual and the balance is a little lower, near 19,672, showing how frequency nudges the result.

Leave the same money for 20 years instead of 10 and it grows to about 40,387, four times the start, because the second decade compounds on a much larger base.

The gap between the two is the whole reason compounding matters, and it widens every year.

Both start the same, but compound interest pulls ahead by more than 16,000 over twenty years. To see the plain percentage behind any figure, the percentage calculator helps.

Four levers set the outcome, and time is the most powerful of them.

Time in the Market

Compounding rewards patience: the final years add the most because they build on the largest balance, so starting early beats starting big.

The Interest Rate

A higher rate raises the base each period grows from, and small rate differences turn into large gaps over decades.

Compounding Frequency

Daily beats monthly beats annual, though the difference shrinks as the rate falls; frequency matters most at high rates.

Adding Contributions

Regular deposits are not included here, but in practice they can dwarf the starting amount over a long horizon.

Planning Long-term Savings

Project what a lump sum in a savings account or fund could become, so you can set a realistic target.

Comparing Accounts by Yield

Two accounts with the same headline rate can pay differently once compounding frequency is counted; the effective yield settles it.

Understanding Debt

Compounding works against you on credit-card balances, so the same math shows why unpaid interest snowballs.

1. Confusing Nominal Rate with Yield

The effective annual yield is higher than the stated rate whenever compounding happens more than once a year.

2. Ignoring Inflation and Tax

This projects nominal growth. Real spending power is lower once inflation and tax are taken out.

3. Assuming a Fixed Rate Is Guaranteed

Investment returns vary year to year; a single fixed rate is a simplification, not a promise.

4. Starting Late

Because the last years compound hardest, delaying even a few years can cost a surprising amount at the end.

5. Forgetting Fees

Annual fees compound too, quietly reducing the balance in the same way interest grows it.

The math is exact for the fixed inputs you enter, but a real account rarely holds a single rate for decades.

It is interest paid on both your original amount and the interest already earned. Because interest earns interest, the balance grows faster over time than with simple interest.

A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the compounding periods per year and t the years. This calculator applies it for you.

More frequent compounding gives a slightly higher balance. Daily beats monthly beats annual, but the difference is small at low rates and larger at high rates.

It is the true yearly return once compounding is counted, found with (1 + r/n)^n - 1. It is always at least the nominal rate and higher when compounding is more frequent.

Roughly divide 72 by the rate. At 7 percent, money doubles in about ten years; at 9 percent, in about eight. This is the rule of 72.

No. This tool grows a single lump sum. Regular deposits can add a great deal more over time, but they are not part of this calculation.

Both. It builds wealth when you invest and save, and it works against you on debts such as credit cards, where unpaid interest compounds too.

No. It shows nominal growth. Your real spending power will be lower once inflation and any tax on the interest are taken into account.

No. The calculation runs in your browser, and nothing you enter is sent anywhere unless you Save a result, which stays on this device only.

• Compound interest (Wikipedia).
• Compound interest calculator (U.S. SEC Investor.gov).
• Compound interest explained (Maths Is Fun).