Compound Interest Calculator
Calculate how your savings or investment grows over time with compound interest. Enter your principal, rate, compounding frequency, and time to see your final balance and year-by-year growth.
Compound Interest Calculator
How to use this tool
- Enter the initial amount you are investing or saving (the principal).
- Enter the annual interest rate as a percentage (e.g. 7 for 7%).
- Select how often interest is compounded — daily, monthly, quarterly, or annually.
- Enter the number of years. Optionally add a monthly contribution to model regular savings.
- Read the results: final balance, total interest earned, and the year-by-year growth chart.
Why use our Compound Interest Calculator?
Compound interest is the single most powerful force in personal finance — your interest earns interest, creating exponential growth over time. This calculator shows exactly how much your money will grow, whether you are building an emergency fund, investing in an index fund, or modelling a retirement portfolio. The year-by-year chart makes the "eighth wonder of the world" visible at a glance.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which only calculates interest on the principal), compound interest grows exponentially — your interest earns interest, leading to accelerating growth over time.
What is the compound interest formula?
The formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the time in years. When you add regular contributions (PMT), the formula becomes A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)].
What is the Rule of 72?
The Rule of 72 is a quick mental shortcut to estimate how long it takes to double your money. Divide 72 by the annual interest rate. At 7%, your money doubles in approximately 72 ÷ 7 ≈ 10.3 years. At 6%, it takes about 12 years. This rule assumes annual compounding and is an approximation, but it is remarkably accurate for rates between 2% and 20%.
How much will $1,000 grow in 10 years at 7%?
With $1,000 principal at 7% annual interest compounded monthly over 10 years, you would have approximately $2,009.66 — roughly doubling your money. If you also contribute $100 per month, the final balance would be around $19,531.82, with $9,531.82 in interest earned on top of $10,000 in total contributions.
What compounding frequency is best?
More frequent compounding means slightly higher returns. Daily compounding gives the most growth, but the difference between daily and monthly compounding is minimal. For a $10,000 investment at 7% over 20 years: annual compounding yields ~$38,697, monthly ~$40,255, and daily ~$40,275. The frequency matters far less than the rate and time horizon.
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