Calculate how your investments grow over time with compound interest. See the power of compounding on your savings.

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Compound Interest Calculator

Calculate how your investments grow over time with compound interest. See the power of compounding on your savings.

Inputs

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Principal

Interest Rate

time

compound

Quick rate presets:

Results

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What is a Compound Interest Calculator?

A Compound Interest Calculator shows how your money grows when interest is earned not just on your initial investment, but also on the interest that accumulates over time. This 'interest on interest' effect is the foundation of long-term wealth building and why starting to invest early makes such a dramatic difference.

How to use

Enter your initial investment amount, expected annual interest rate (historical stock market average is about 10%, conservative estimate is 6-7%), the number of years you plan to invest, and how often interest compounds (monthly is most common). The calculator shows your future value, total interest earned, and growth percentage.

Frequently Asked Questions

What is compound interest?

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. Essentially, it means earning 'interest on interest,' which causes your wealth to grow at a faster rate compared to simple interest.

How is compound interest calculated?

The formula used is A = P(1 + r/n)^(nt), where 'A' is the future value, 'P' is the principal investment amount, 'r' is the annual interest rate (decimal), 'n' is the number of times interest is compounded per year, and 't' is the time in years.

What is the difference between simple interest and compound interest?

Simple interest is calculated only on the original principal (the amount of money you initially deposited or borrowed). Compound interest is calculated on the principal plus any interest that has already been added to the account.

Why does the compounding frequency matter?

The frequency determines how often interest is added to the principal. The higher the frequency (e.g., daily vs. annually), the faster your investment grows because interest is calculated on a more regularly increasing balance.

Can I include monthly contributions in this calculation?

Yes, this calculator supports recurring deposits. By entering a monthly contribution amount, you can see how regular savings combined with compound interest accelerate your investment growth over time.

What is the 'Principal' amount?

The principal is the initial sum of money you are investing or saving. It is the starting balance before any interest or additional contributions are applied.

Your Next Steps

Plan your retirement

See how your savings grow over decades

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Understanding Your Challenges

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