Compound Interest Calculator
See how your savings or investment grows with compound interest. Includes monthly contributions and a full year-by-year breakdown.
How Compound Interest Works
Formula: A = P(1 + r/n)nt | 💡 Rule of 72: divide 72 by your rate to estimate years to double.
| Variable | Meaning |
|---|---|
| A | Final amount |
| P | Principal (initial investment) |
| r | Annual rate (decimal) |
| n | Compounding periods per year |
| t | Time in years |
Frequently Asked Questions
Compound interest is interest calculated on both the initial principal and the accumulated interest. Your interest earns interest, causing exponential growth over time — unlike simple interest which is only calculated on the principal.
More frequent compounding earns slightly more. Daily compounds slightly more than monthly, which slightly exceeds annual. In practice, match whatever your bank or investment account uses.
Dramatically. Starting with $10,000 at 7% for 30 years yields ~$76,000. Adding $200/month grows this to over $300,000 — because each contribution also compounds over time.
High-yield savings accounts typically offer 4–5% APY. Index funds historically average 7–10% annual returns. CD rates vary by term. For debt (loans, mortgages), lower is always better.