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Compound Interest Calculator

Quick answer

Compound interest grows savings on itself: A = P(1+r/n)^nt puts 10,000 at 8% monthly at ≈22,196 in 10 years.

  • Project any horizon instantly.

Figures are estimates from this calculator’s standard formula — adjust the inputs in the tool below for your exact number.

How the Compound Interest Calculator Works

A = P(1 + r/n)^(nt)

Compound interest is calculated on both the principal amount and the accumulated interest from previous periods. This means your money grows faster over time because interest is added to the balance and begins earning interest itself.

  1. 1

    Step 1

    Enter the principal amount (P) you want to invest

  2. 2

    Step 2

    Specify the annual interest rate (r) as a percentage

  3. 3

    Step 3

    Choose the compounding frequency per year (n)

  4. 4

    Step 4

    Set the investment duration in years (t)

  5. 5

    Step 5

    Calculate the final value using the formula

Use Cases

Savings Accounts

See how your savings will grow in a savings account over time

Certificates of Deposit

Calculate expected returns from CDs and fixed deposits

Retirement Planning

Estimate retirement fund size based on current savings

Comparing Investment Options

Compare different investment offers to choose the best one

Tips

  • 1

    The more frequent the compounding, the higher the final return

  • 2

    Start investing early to maximize compound interest benefits

  • 3

    Reinvest earnings to maximize returns

  • 4

    Compare effective interest rates, not just nominal rates

  • 5

    Use the Rule of 72 to estimate how long it takes to double your money

Common Mistakes

  • Confusing Simple and Compound Interest

  • Ignoring Inflation

  • Overlooking Fees and Taxes

  • Overestimating Returns

FAQs

What is the difference between compound and simple interest?

Simple interest is calculated on the principal only, while compound interest is calculated on the principal plus accumulated interest, leading to faster growth.

What is the Rule of 72?

The Rule of 72 is a quick method to estimate how long it takes to double your money. Divide 72 by the interest rate to get the number of years. Example: 72 / 6% = 12 years.

Is monthly compounding better than annual?

Yes, the more frequent the compounding (monthly, daily), the higher the effective return because interest is added to the balance faster and starts earning interest sooner.

How do I calculate the effective annual rate?

Effective annual rate = (1 + r/n)^n - 1, where r is the nominal rate and n is the number of compounding periods per year.

When should I start investing for the best returns?

The earlier you start, the better. Time is the most important factor in compound interest; a small amount invested for a long period can outperform a large amount invested for a short period.

Related tools

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Daily Compound Interest Calculator

Calculate daily compound interest.

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Weekly Compound Interest Calculator

Calculate weekly compound interest.

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Savings Interest Calculator

Monthly interest = balance × APY ÷ 12: 20,000 at 3.75% earns 62.5 a month — about 763 over a year with monthly compounding.

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Interest Rate Parity (IRP)

Calculate forward exchange rate from interest rate parity.

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Investment Return Calculator

Total return = (final − initial) ÷ initial: 20,000 growing to 27,500 in 3 years is +37.5% total, ≈11.2% annualized.

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Investment Calculator - Calculate Investment Returns Online

FV = P(1+r)^t + PMT·((1+r)^t−1)/r: 10,000 plus 250 monthly at 7% grows to ≈75,900 in 15 years — deposits and compounding combined.