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Compound Interest Calculator

Albert Einstein called it the "8th Wonder of the World." Calculate how small, regular investments can grow into massive wealth over time through the power of compounding.

USA ($) Mode
$
1K1M
%
0.1%8%
Years
1Y30Y

Insight: More frequent compounding = Higher returns. Try switching from Yearly to Monthly!

Total Maturity

$12,462
Principal$10,000
Total Interest$2,462

Wealth Composition

Why Compounding Matters

When you save money in a standard account, you earn interest on your principal. But with Compound Interest, you earn interest on your principal plus the interest you've already earned.

This "snowball effect" means your money grows exponentially rather than linearly. The key ingredients are time and consistency—starting early is often more important than starting big.

The Math Behind the Magic

A = P (1 + r/n)(nt)
  • A = Future Value of Investment
  • P = Initial Principal Balance
  • r = Interest Rate (decimal)
  • n = Number of times compounded per year
  • t = Number of years invested

Time is Money

The longer you leave your money invested, the more powerful the compounding effect becomes.

Frequency Wins

Compounding monthly earns you more than compounding yearly. Use the dropdown to see the difference.

Regular Additions

Adding even a small amount to your investment monthly can double your final result.

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Frequently Asked Questions

What is the difference between Simple and Compound Interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal PLUS the interest accumulated over previous periods. This 'interest on interest' makes your money grow much faster.
How does compounding frequency affect my returns?
The more frequently interest is compounded (added to your account), the more you earn. For example, 'Monthly' compounding yields more than 'Yearly' compounding because the interest starts earning its own interest sooner.
What is the Rule of 72?
The Rule of 72 is a mental math shortcut to estimate how long it takes to double your investment. Divide 72 by your annual interest rate. For example, at 8% return, your money doubles in roughly 9 years (72 ÷ 8 = 9).
Which investments use compound interest?
Most growth investments benefit from compounding if you reinvest the returns. Examples include Mutual Funds, Stocks (dividend reinvestment), 401(k)s, Roth IRAs, and High-Yield Savings Accounts.

Disclaimer: This Compound Interest Calculator is for educational purposes. It assumes a constant rate of return, which may not reflect actual market fluctuations. Taxes and inflation are not included unless specified.