Compound Interest Calculator
Calculate how your savings and investments grow over time with compound interest. See the power of compounding with daily, monthly, or yearly calculations.
How to Use
Enter your initial investment, optional monthly contributions, interest rate, and time period. Choose how often interest compounds. Click Calculate to see your total balance, total contributions, and interest earned. All calculations run locally in your browser.
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The Compound Interest Formula
The standard compound interest formula is:
A = P(1 + r/n)^(nt)
Where:
• A = Final amount
• P = Principal (initial investment)
• r = Annual interest rate (decimal)
• n = Compounding frequency per year
• t = Number of years
For regular contributions, the formula becomes more complex, but our calculator handles it automatically.
The Power of Compound Interest
Compound interest is often called the "eighth wonder of the world" because of how dramatically it can grow wealth over time. A $10,000 investment at 7% annual interest becomes:
• After 10 years: $19,672
• After 20 years: $38,697
• After 30 years: $76,123
• After 40 years: $149,745
The key is starting early and being consistent with contributions.
The Power of Compound Interest
Compound interest is the most powerful force in finance — it makes your money grow exponentially over time. CalcSolver's compound interest calculator shows how savings or investments accumulate with daily, monthly, or annual compounding frequencies.
Investing $10,000 at 7% annual return with monthly compounding grows to $19,672 in 10 years — nearly doubling without any additional contributions. With $500/month added, the same account reaches $96,000 in 10 years. Over 30 years, that same monthly contribution strategy yields over $600,000.
The Rule of 72 gives a quick estimate: divide 72 by your interest rate to find how many years it takes to double your money. At 6%, your money doubles in 12 years; at 8%, in 9 years. Start investing early — even small amounts compound dramatically over long periods. Use our investment calculator and retirement calculator for long-term projections.
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Frequently Asked Questions
What is compound interest and how does it work?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, compound interest earns "interest on interest," making your money grow faster over time.
What is the compound interest formula?
The compound interest formula is: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate (as decimal), n is the number of times interest compounds per year, and t is the number of years.
What is the difference between compound interest and simple interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus accumulated interest. For example, $10,000 at 5% for 10 years: Simple interest yields $15,000, while compound interest yields $16,288.95.
How often should interest compound for maximum returns?
The more frequently interest compounds, the more you earn. Common frequencies: annually, quarterly, monthly, and daily. Daily compounding yields the highest returns, but the difference between monthly and daily is usually small.
How can I maximize compound interest on my savings?
Start investing early, add regular contributions, choose higher interest rate accounts, reinvest dividends, and avoid withdrawing interest. Time is the most important factor in compound interest growth.