Compound Interest Calculator
See how your money grows with compound interest. Calculate investment returns with daily, monthly, quarterly, or yearly compounding — with interactive growth charts and year-by-year breakdown.
| Year | Start Balance | Interest | Contributions | End Balance |
|---|
What is Compound Interest?
Compound interest is often called the "eighth wonder of the world." Unlike simple interest (calculated only on the principal), compound interest is calculated on both the principal AND accumulated interest from previous periods — creating exponential growth. Our compound interest calculator shows exactly how powerful this effect is over time. For building long-term wealth, also explore our investment calculator and retirement calculator.
📐 Compound Interest Formula
- A = Final amount
- P = Principal (initial investment)
- r = Annual interest rate (decimal)
- n = Compounding periods per year
- t = Time in years
Example: $10,000 at 7% for 10 years (annually):
A = 10,000 × (1.07)^10 = $19,671
⚡ Compounding Frequency Comparison
$10,000 at 7% for 10 years:
| Frequency | Final Amount |
|---|---|
| Annually | $19,671 |
| Quarterly | $19,890 |
| Monthly | $20,097 |
| Daily | $20,136 |
More frequent compounding = slightly higher returns. But the rate and time matter far more than frequency.
💡 Power of Starting Early
Investing $5,000/year at 7% annual return:
- Start at 25, retire at 65: $1,068,048
- Start at 35, retire at 65: $472,304
- Start at 45, retire at 65: $196,715
Starting 10 years earlier more than doubles your savings! Time is your most valuable investing asset.
Use our retirement calculator to plan your specific goal.
📊 Rule of 72
A quick mental math trick: divide 72 by your interest rate to find how many years it takes to double your money.
- At 4%: doubles every 18 years
- At 6%: doubles every 12 years
- At 8%: doubles every 9 years
- At 10%: doubles every 7.2 years
- At 12%: doubles every 6 years
The Rule of 72 also applies to debt — credit card debt at 24% APR doubles in just 3 years!