Compound Interest Calculator
Calculate how your money grows with compound interest. See the power of compounding with different interest rates and time periods.
Calculate Compound Interest
Results
How It Works
Compound interest is when you earn interest on both your original money and the interest you already earned. This makes your money grow faster over time.
For example, if you invest $1,000 at 5% interest per year, after one year you have $1,050. In the second year, you earn 5% on the full $1,050, not just the original $1,000.
The compound interest 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 compounding frequency, and t is the time in years.
Enter Details
Principal amount, interest rate, time period
Calculate Growth
Get final amount and total interest earned
Common Examples
Savings Account
$5,000 at 2% annual interest compounded monthly for 5 years = $5,525.50
Investment Portfolio
$10,000 at 7% annual return compounded annually for 20 years = $38,696.84
Retirement Fund
$25,000 at 6% annual interest compounded quarterly for 30 years = $152,203.27
Education Fund
$15,000 at 4% annual interest compounded semi-annually for 15 years = $27,149.52
Year-by-Year Breakdown
| Year | Starting Balance | Interest Earned | Ending Balance |
|---|---|---|---|
| 1 | $10000.00 | $511.62 | $10511.62 |
| 2 | $10511.62 | $537.79 | $11049.41 |
| 3 | $11049.41 | $565.31 | $11614.72 |
| 4 | $11614.72 | $594.23 | $12208.95 |
| 5 | $12208.95 | $624.63 | $12833.59 |
| 6 | $12833.59 | $656.59 | $13490.18 |
| 7 | $13490.18 | $690.18 | $14180.36 |
| 8 | $14180.36 | $725.49 | $14905.85 |
| 9 | $14905.85 | $762.61 | $15668.47 |
| 10 | $15668.47 | $801.63 | $16470.09 |
*Showing first 10 years of growth
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It makes your money grow faster than simple interest.
How often should interest be compounded?
More frequent compounding leads to higher returns. Daily compounding gives slightly better results than monthly, which is better than quarterly or annual compounding.
What is the rule of 72?
The rule of 72 helps estimate how long it takes for money to double. Divide 72 by your interest rate. For example, at 6% interest, your money doubles in about 12 years (72 ÷ 6 = 12).
Is this calculator accurate?
Yes, our compound interest calculator uses the standard mathematical formula and provides accurate results for planning purposes. Always consult with financial advisors for investment decisions.
Can I use this for loan calculations?
This calculator is designed for investment growth. For loan calculations with compound interest, the same formula applies but represents what you owe rather than what you earn.
Tips for Maximizing Compound Interest
- Start investing early to give compound interest more time to work
- Choose investments with higher interest rates when possible
- Reinvest your earnings instead of withdrawing them
- Make regular contributions to increase your principal
- Look for accounts or investments that compound more frequently
- Be patient - compound interest works best over long periods