Compound Interest Calculator
Calculate simple and compound interest with optional monthly contributions. See your year-by-year growth chart and full schedule — free, instant, no signup.
| Year | Starting balance | Contributions | Interest earned | Ending balance |
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Rule of 72 — How long to double your money?
Formula: 72 ÷ interest rate = years to double. Works best for rates between 6–10%.
What is compound interest?
Compound interest is interest calculated on both the initial principal and the interest already accumulated. Unlike simple interest — which is calculated only on the principal — compound interest grows exponentially over time because each period's interest becomes part of the base for the next period's calculation.
This is often called the "eighth wonder of the world" — Albert Einstein is widely (if perhaps apocryphally) credited with this phrase. The longer your money compounds, the more dramatic the effect.
Compound interest formula
A = P × (1 + r/n)^(n×t) Where: A = Final amount P = Principal (initial investment) r = Annual interest rate (as a decimal, e.g. 8% = 0.08) n = Number of times interest compounds per year t = Time in years Example: $10,000 at 8% compounded monthly for 10 years A = 10,000 × (1 + 0.08/12)^(12×10) A = 10,000 × (1.00667)^120 A = $22,196.40
Simple interest formula (for comparison):
I = P × r × t Example: $10,000 at 8% simple interest for 10 years I = 10,000 × 0.08 × 10 = $8,000 Final amount = $18,000 (vs $22,196 with compounding)
Does compounding frequency matter?
Yes — the more frequently interest compounds, the more you earn. On $10,000 at 8% for 10 years:
- Annually: $21,589
- Quarterly: $22,080
- Monthly: $22,196
- Daily: $22,253
Most savings accounts and fixed deposits compound monthly or quarterly. Credit cards and loans often compound daily — which works against you as a borrower.
Frequently asked questions
A = P × (1 + r/n)^(n×t) where P is principal, r is the annual rate as a decimal, n is compounding periods per year, and t is years. Or use the calculator above — enter your values and the result updates instantly.r = n × ((A/P)^(1/(n×t)) - 1). For example, if $10,000 grew to $18,000 over 10 years compounding monthly: r = 12 × ((18000/10000)^(1/120) - 1) = 5.87% annual rate.