Compound Interest Calculator
Watch compounding turn time into money.
Compound interest is interest earning interest — the engine behind every long-term investment. Choose yearly, quarterly or monthly compounding to see how frequency nudges your final balance. The real lesson: starting early beats chasing higher returns.
How it's calculated
Future value = P × (1 + r/n)^(n×t), where P is the principal, r the annual rate, n the compounding frequency per year and t the years.
Frequently asked questions
Why does compounding frequency matter?
Interest added more often starts earning its own interest sooner. Monthly compounding beats yearly compounding at the same nominal rate — though the difference is small compared to the effect of time and rate.
What's the Rule of 72?
Divide 72 by your annual rate to estimate how many years it takes money to double. At 7%, money doubles roughly every 10 years; at 10%, every 7.2 years. Try it against this calculator.
Simple vs compound interest?
Simple interest pays only on the original principal; compound interest pays on principal plus accumulated interest. Over long periods the gap is enormous — that's why starting early matters more than finding the perfect rate.