Compound Interest Calculator

See the power of compounding and how your money grows over time

Investment Details

1 yr20 years50 yrs

After 20 Years

$302,370

Total Invested

$130,000

Interest Earned

$172,370

Composition

Summary

Initial Investment$10,000
Total Contributions$130,000
Total Interest$172,370
Effective Annual Rate7.23%
Final Balance$302,370

Compound vs Simple Interest

The growing gap between compound and simple interest shows the power of compounding

Year-by-Year Breakdown

YearContributionInterestTotal InvestedBalance
1$6,000$955$16,000$16,955
2$6,000$1,458$22,000$24,413
3$6,000$1,997$28,000$32,411
4$6,000$2,575$34,000$40,986
5$6,000$3,195$40,000$50,182
6$6,000$3,860$46,000$60,042
7$6,000$4,573$52,000$70,614
8$6,000$5,337$58,000$81,952
9$6,000$6,157$64,000$94,108
10$6,000$7,036$70,000$107,144
11$6,000$7,978$76,000$121,122
12$6,000$8,988$82,000$136,110
13$6,000$10,072$88,000$152,182
14$6,000$11,234$94,000$169,416
15$6,000$12,480$100,000$187,895
16$6,000$13,815$106,000$207,710
17$6,000$15,248$112,000$228,958
18$6,000$16,784$118,000$251,742
19$6,000$18,431$124,000$276,173
20$6,000$20,197$130,000$302,370

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What is Compound Interest?

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. Essentially, it is "interest on interest," which allows your savings or investments to grow exponentially over time rather than linearly.

Albert Einstein famously called compound interest the "eighth wonder of the world." Our calculator helps you visualize this power by showing how small, regular contributions can transform into significant wealth over a long-term horizon.

How to Use the Compound Interest Calculator

To project your investment growth, follow these five steps:

  1. 1
    Enter Your Initial InvestmentInput the starting amount of money you have ready to invest or save today.
  2. 2
    Set Regular Monthly AdditionsConsistency is key. Even a small monthly contribution can drastically change the final outcome due to compounding.
  3. 3
    Select the Time HorizonChoose how many years you plan to stay invested. Compound interest becomes more powerful the longer the timeframe.
  4. 4
    Input Expected Interest RateEnter the estimated annual return. For reference, the S&P 500 has historically averaged around 10% before inflation.
  5. 5
    Select Compounding FrequencyChoose whether interest is added daily, monthly, or annually. Frequent compounding accelerates growth.

Frequently Asked Questions

What is the formula for compound interest?

The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal balance, r is the annual interest rate, n is the number of times interest compounds per year, and t is the number of years.

How does compounding frequency affect my savings?

The more frequently interest compounds, the faster your money grows. For example, interest that compounds daily will result in a slightly higher final balance than interest that compounds monthly or annually, even if the interest rate (APR) is identical.

What is the "Rule of 72"?

The Rule of 72 is a quick way to estimate how long it will take for your money to double at a fixed interest rate. Simply divide 72 by your annual interest rate. For example, at a 6% interest rate, your money will double in approximately 12 years (72 / 6 = 12).

The Rule of 72

How long to double your money?

4% Return18 Years
7% Return10.3 Years
10% Return7.2 Years

Calculation: 72 / Interest Rate = Years to Double.

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