Compound Interest Calculator
Estimate future value, total contributions, and interest earned from compound growth.
Calculate Compound Interest
Enter your investment details to estimate compound interest.
Compound Interest Formula
Compound interest means interest is earned on both the original amount and previous interest.
How compound interest works
Compound interest is the process of earning interest on both your original amount and the interest that has already been added. Over time, this can create powerful growth.
Why compounding frequency matters
The more often interest is compounded, the more frequently interest is added to the balance. Monthly or daily compounding can produce slightly higher results than annual compounding.
Planning insight
Small changes in time, interest rate, and starting amount can have a large effect over long periods. Quietly, time is often the most powerful part of compound growth.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both the original amount invested and any interest that has already been added. Over time, this creates a snowball effect where growth can accelerate as interest earns interest.
Is compound interest better than simple interest?
Compound interest generally produces greater growth than simple interest because previous interest payments are added back into the balance. The longer money remains invested, the larger the difference can become.
What does compounding frequency mean?
Compounding frequency refers to how often interest is added to the balance. Common options include annually, quarterly, monthly, and daily. More frequent compounding can result in slightly higher returns over time.
How long does compound interest take to make a difference?
Compound interest works best over long periods. While growth may seem slow at first, the effect becomes increasingly powerful over 10, 20, or 30 years as interest continues to build on previous gains.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes an investment to double. Divide 72 by the annual interest rate. For example, at 6% interest, an investment would take approximately 12 years to double.
Can I use this calculator for savings accounts and investments?
Yes. This calculator can be used to estimate compound growth for savings accounts, investment portfolios, pensions, and other situations where interest or returns are regularly compounded.