Compound Interest Calculator
Calculate how your investments grow over time with compound interest. See the power of compounding with regular contributions.
Enter your investment details to see how your money grows.
How It Works
Compound interest is interest calculated on both the initial principal and accumulated interest from previous periods. The formula is A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is time in years.
More frequent compounding leads to slightly higher returns. Daily compounding earns marginally more than monthly, which earns more than annual compounding.
Frequently Asked Questions
What is compound interest?
Compound interest is "interest on interest"—you earn returns not just on your original investment, but also on previously earned interest. This creates exponential growth over time.
What's the Rule of 72?
Divide 72 by your interest rate to estimate years to double your money. At 7%, money doubles in roughly 72/7 ≈ 10 years. It's a quick mental calculation for understanding compound growth.
How often should interest compound?
More frequent compounding is better but the difference is small. Monthly vs daily compounding might differ by fractions of a percent annually. Focus more on the interest rate and consistent contributions.