Compound Interest Calculator
See how your money grows over time
Enter Your Details
Future Value
$260,464
Total Interest
$130,464
Total Deposits
$130,000
Interest Earned
100%
Growth Over Time
⚡ Rule of 72
At 7% interest, your money doubles every:
10.3 years
Formula: 72 ÷ interest rate = years to double
Compound vs Simple Interest
Simple Interest
$150,000
Compound Interest
$260,464
You earn $110,464 more with compound interest!
What is Compound Interest?
Compound interest is the interest calculated on the initial principal and also on the accumulated interest from previous periods. It's often called "interest on interest" and makes your money grow faster than simple interest.
Where: A = Final amount, P = Principal, r = Annual interest rate, n = Compounds per year, t = Time in years
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both your initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns on the original amount, compound interest grows exponentially over time.
How often should interest compound?
More frequent compounding leads to higher returns. Daily compounding earns slightly more than monthly, but the difference is minimal for most investments. The real power comes from time, not compounding frequency.
What's a realistic interest rate to expect?
Savings accounts: 0.5-5%. Stock market average (S&P 500): 7-10% annually. High-yield bonds: 5-8%. Real estate: 8-12%. Always consider inflation (2-3%) when planning.
Why should I start investing early?
Due to compound interest, starting 10 years earlier can double your final amount. A 25-year-old investing $500/month at 7% will have $1.2M by 65. Starting at 35 yields only $567K—half as much from the same contributions.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your interest rate: at 7% interest, your money doubles in about 10.3 years (72 ÷ 7 = 10.3).
What's the difference between compound and simple interest?
Simple interest only earns on your original principal. Compound interest earns on principal plus accumulated interest. Over 20 years at 7%, $10,000 grows to $24,000 with simple interest but $38,700 with compound interest.
How do monthly contributions affect compound growth?
Regular contributions dramatically accelerate wealth building. Adding just $200/month to a $10,000 investment at 7% over 20 years turns $58,000 in deposits into over $150,000—nearly triple your money.
Does compound interest work on debt too?
Yes, and it works against you. Credit card debt at 20% APR compounds, making balances grow rapidly. A $5,000 balance with minimum payments can take 20+ years to pay off and cost $10,000+ in interest.
What's the best account for compound interest?
For safety: high-yield savings accounts (4-5% APY). For growth: index funds or ETFs tracking the S&P 500 (historically 7-10%). Tax-advantaged accounts like 401(k) or IRA maximize compound growth by deferring taxes.
How accurate is this compound interest calculator?
This calculator provides accurate mathematical projections based on consistent returns. Real investments fluctuate—stocks can gain 20% one year and lose 10% the next. Use these results for planning, not guarantees.