Compound Interest Calculator — Grow Your Money
See how compound interest grows your money over time. Enter your principal, annual interest rate, compounding frequency, and time period to see your total value and interest earned. Compound interest is the most powerful force in personal finance.
How the Formula Works
Formula: A = P × (1 + r/n)^(n×t)
Where P = Principal, r = Annual Rate, n = Compounding Frequency, t = Years
Example: $5,000 at 7% compounded monthly for 10 years → $9,978.77 total → $4,978.77 interest earned.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest. Unlike simple interest, it grows exponentially over time.
How often should interest compound?
More frequent compounding = more growth. Daily > Monthly > Quarterly > Annually. The difference is small but meaningful over long periods.
What is the Rule of 72?
Divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 8% return, money doubles in ~9 years.
What is a realistic compound interest rate?
High-yield savings: 4–5%. Bonds: 3–6%. Stock market index funds: 7–10% historically. Individual stocks vary widely.
How does compound interest differ from simple interest?
Simple interest: Interest = Principal × Rate × Time. Compound interest reinvests earned interest, so each period earns more than the last.