Calculate how your investments and savings grow with compound interest. Plan your financial future with our accurate, easy-to-use calculator.
Enter your starting investment or savings amount
Amount you plan to add regularly
How long you plan to invest
Expected annual return on your investment
How often interest is compounded
Compound interest is the interest calculated on the initial principal amount, which also includes all the accumulated interest from previous periods on a deposit or loan. This powerful financial concept is often called "interest on interest" and is the key to building long-term wealth.
Unlike simple interest, where interest is only earned on the principal amount, compound interest allows your money to grow at an accelerating rate over time. The longer you invest and the more frequently interest compounds, the more dramatic the growth becomes.
Compound interest is the most powerful force in finance. Albert Einstein reportedly called it "the eighth wonder of the world" and "the most powerful force in the universe."
The compound interest formula is the foundation of all investment calculations:
A = P(1 + r/n)nt
A = Future value of the investment
P = Principal investment amount
r = Annual interest rate (as a decimal)
n = Number of times interest is compounded per year
t = Time in years
Our compound interest calculator automatically applies this formula to give you accurate projections of your investment growth.
Initial deposit: $5,000
Monthly contribution: $100
Interest rate: 2% annually
Time period: 10 years
Result: $17,106.29
Total interest earned: $5,106.29
Initial investment: $10,000
Monthly contribution: $500
Interest rate: 7% annually
Time period: 20 years
Result: $267,856.42
Total interest earned: $147,856.42
Time is your greatest ally in compound interest. The earlier you start investing, the more time your money has to grow exponentially. Even small amounts invested early can outperform larger amounts invested later.
Consistent contributions, even small ones, can dramatically increase your final balance. Set up automatic transfers to ensure you're regularly adding to your investments.
Even small differences in interest rates can have massive impacts over long periods. Compare different investment options to maximize your returns.
Let your interest compound by reinvesting rather than withdrawing. This allows the full power of compound interest to work in your favor.
The Rule of 72 is a simple mental math trick to estimate how long it takes for an investment to double:
Years to Double = 72 ÷ Annual Interest Rate
4% Interest Rate
18 Years
6% Interest Rate
12 Years
8% Interest Rate
9 Years
Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal and the accumulated interest from previous periods. This makes compound interest much more powerful for long-term growth.
More frequent compounding (daily or monthly) generally leads to higher returns than annual compounding. However, the difference becomes smaller as the frequency increases. Monthly compounding is often a good balance.
Yes! Compound interest works both ways. When you have debt with compound interest (like credit cards), the interest can grow rapidly and become difficult to pay off. This is why it's important to pay off high-interest debt quickly.
Start with retirement accounts like 401(k)s or IRAs, which offer tax advantages. Choose low-cost index funds or ETFs for broad market exposure. Even small regular contributions can grow significantly over time.
Inflation reduces the real purchasing power of your returns. To maintain real growth, you need an interest rate higher than the inflation rate. This is why many investors target returns of 7-10% annually.
Use our compound interest calculator to see how your money can grow over time. Whether you're planning for retirement, saving for a major purchase, or building wealth, understanding compound interest is essential.
