Compound Interest Calculator
See how your money grows over time with compound interest. Get a full year-by-year breakdown.
Compound Interest Calculator
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The compound interest calculator shows exactly how a lump sum grows when interest is reinvested over time. Enter a principal, annual rate, compounding frequency, and time period to see your final balance and total interest earned. Works for any currency. This tool is most valuable for long-term financial planning: understanding how much a retirement account might grow, whether a savings goal is on track, or how a single investment made today could multiply over decades. The numbers produced by compound interest are often counterintuitive — a small increase in rate or a few extra years can make an enormous difference to the final figure. It is equally useful in reverse, as a reality check on debt. Credit cards and personal loans compound interest in your lender's favour rather than yours — running this calculator on a debt balance shows exactly how fast the hole deepens if minimum payments are made. Results are for informational purposes and do not constitute financial advice.
How to Use the Compound Interest Calculator
The Compound Interest Calculator is designed to give you an accurate answer in seconds. Follow these steps:
- Step 1: Enter your starting principal — the initial lump sum you are investing or depositing.
- Step 2: Enter the annual interest rate (%). Use the rate offered by your savings account, bond, or investment product.
- Step 3: Choose the compounding frequency — how often interest is added to your balance. Monthly compounding is the most common for savings accounts.
- Step 4: Enter the number of years you plan to leave the money invested.
- Step 5: Click Calculate to see your final balance, total interest earned, and a year-by-year growth breakdown.
No account or sign-up required. All calculations run locally in your browser — nothing is stored or transmitted to any server.
How It Works
A = P(1 + r/n)^(nt)
Formula: A = P(1 + r/n)^(nt) P is the starting principal, r is the annual interest rate as a decimal, n is the number of compounding periods per year, and t is time in years. The exponent is what separates compound growth from simple interest — each period, interest is earned on the accumulated total, not just the original amount. Example: $10,000 at 7% annual rate, compounded monthly, for 20 years. A = 10,000 × (1 + 0.07/12)^(12×20) A = 10,000 × (1.005833)^240 A ≈ $40,388 That is $30,388 in interest on a $10,000 principal. The same sum under simple interest (7% × 20 years) would return just $14,000 in interest — $16,388 less. Monthly compounding slightly outperforms annual compounding at the same stated rate because interest is reinvested more frequently throughout the year. The most important variable in compound interest is time, not rate. Starting with $5,000 at age 25 at 7% grows to approximately $75,000 by age 65. Waiting until age 35 to invest the same $5,000 at the same rate produces about $38,000 — roughly half as much from a 10-year head start. This is why financial advisers emphasise starting early even with small amounts: the compounding window matters more than the initial deposit size in most long-term scenarios.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the original principal and the interest already accumulated. Unlike simple interest (which only applies to the starting amount), compound interest grows exponentially — each period's interest becomes part of the base for the next period. Albert Einstein reportedly called it the eighth wonder of the world, though the attribution is disputed. What's not disputed is its dramatic long-term effect on savings and debt alike.
How much will $10,000 grow in 10 years?
At 7% annual interest compounded monthly, $10,000 grows to approximately $20,097 after 10 years — just over double. At 5%, the result is about $16,470. At 3% (closer to current high-yield savings), it reaches around $13,494. The rate and compounding frequency matter significantly; use this calculator to run the exact scenario for your situation.
What is the difference between compound and simple interest?
Simple interest is calculated only on the original principal: Interest = P × r × t. Compound interest is calculated on the principal plus all previously earned interest. On $10,000 at 7% for 20 years, simple interest returns $14,000 in interest; compound interest (monthly) returns about $30,388. The gap widens dramatically over time, which is why starting to save early has such an outsized impact.
What is the Rule of 72?
The Rule of 72 is a quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 7%, doubling takes roughly 72 ÷ 7 = 10.3 years. At 6%, about 12 years. At 9%, about 8 years. It's an approximation, but it's accurate enough for quick comparisons and holds up well for rates between 3% and 12%.
Is the compound interest calculator free?
Yes — free to use with no sign-up required. All calculations run in your browser and no data is stored or transmitted. For precise investment planning, consult a qualified financial adviser; this tool is designed for quick estimates and educational scenarios.