See how compound interest grows your savings over time.
Enter principal, annual rate, time, and compounding frequency to see your investment grow.
Final amount
$0
Total interest
$0
Growth multiple
1.00x
Formula: A = P × (1 + r/n)^(n×t)
The Compound Interest Calculator shows how an investment grows over time when interest is reinvested rather than withdrawn. Enter your principal, annual interest rate, time horizon, and compounding frequency. The calculator returns the final amount, total interest earned, and the growth multiple — how many times your initial investment has multiplied.
A = P × ( 1 + r/n )^(n × t)
Where:
Total compound interest = A − P.
Suppose you invest $5,000 at 7% annual interest compounded monthly for 10 years:
Your money doubled in 10 years. This is the power of compound interest — without adding a single dollar, your investment grew by 100%.
The more frequently interest compounds, the more you earn. A $10,000 investment at 10% for 10 years produces:
The difference between annual and daily compounding is $1,242 over 10 years — meaningful but not transformative. The much bigger lever is the interest rate itself. The same $10,000 at 5% (annually) for 10 years grows to only $16,289, while at 15% it grows to $40,456. This is why investors obsess over finding higher returns.
A quick mental-math shortcut for compound interest is the Rule of 72. Divide 72 by your annual interest rate (as a percentage) to estimate how many years it takes for your money to double. At 8%, money doubles in 9 years (72 ÷ 8). At 6%, it takes 12 years. At 12%, just 6 years. This rule is remarkably accurate for rates between 6% and 12% and is a useful sanity check on the calculator\'s output.
Compound interest is the mathematical foundation of long-term investing. Albert Einstein is often (perhaps apocryphally) quoted as calling it "the eighth wonder of the world." Whether or not he said it, the principle holds: starting early matters far more than starting big. A 25-year-old who invests $5,000/year at 8% for 10 years and then stops will have more at age 65 than a 35-year-old who invests $5,000/year at 8% for 30 years. Time, not amount, is the dominant variable.
Compound interest is interest calculated on the initial principal plus all accumulated interest from previous periods. Unlike simple interest (which only grows linearly), compound interest grows exponentially, making it the most powerful force in long-term investing.
A = P × (1 + r/n)^(n×t), where A is the final amount, P is principal, r is annual interest rate, n is compounding frequency per year, and t is time in years. Total interest = A − P.
Savings accounts usually compound daily or monthly. CDs compound daily. Mortgages compound monthly. Credit cards compound daily. The more frequent the compounding, the more interest accrues.
APR (Annual Percentage Rate) is the simple annual rate. APY (Annual Percentage Yield) includes the effect of compounding. A 12% APR compounded monthly gives an APY of about 12.68%.
The Rule of 72 estimates how long it takes money to double: Years to double ≈ 72 ÷ annual rate (%). At 8% interest, money doubles in about 9 years (72 ÷ 8 = 9). At 6%, it takes 12 years.
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