Compound Interest Calculator
See how your money grows over time. Calculate total interest, final balance, and growth plan with periodic contributions. Interactive chart and year-by-year breakdown.
Enter your capital
Initial amount and periodic contributions
Set rate & duration
Annual rate and compounding frequency
See the growth
Chart, table and comparison with simple interest
Compound Interest Calculator
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How Compound Interest Works
Compound interest is the mechanism where earned interest is reinvested and generates new interest in turn. This creates exponential growth: in the early years the difference from simple interest is minimal, but over time it becomes enormous.
The compound interest formula is: A = P × (1 + r/n)n×t, where P is the principal, r is the annual rate (decimal), n is the compounding frequency and t is the number of years. Adding periodic contributions, the formula becomes: A = P×(1+r/n)nt + PMT×[((1+r/n)nt-1)/(r/n)].
The Rule of 72 is a useful shortcut: divide 72 by the interest rate to estimate how many years it takes to double your money. For example, at 6% annually it takes about 12 years. This calculator uses the exact formula and also shows the comparison with simple interest.
Periodic contributions dramatically amplify the compound interest effect. Even small monthly amounts, invested consistently over decades, can generate significant wealth. Use this calculator to discover how much your investment could grow.
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Percentage Calculator →Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (calculated only on the principal), it generates exponential growth over time. It is the fundamental principle behind any long-term investment.
What is the difference between nominal rate and APY?
The nominal rate is the stated rate (e.g., 5% annually). APY (Annual Percentage Yield) accounts for compounding frequency. With monthly compounding at 5%, the APY is about 5.12%. The more frequent the compounding, the higher the APY.
Should I start investing as early as possible?
Yes, time is the most important factor in compound interest. Starting 10 years earlier can double the final result. Even small amounts invested early outperform large amounts invested late. This calculator clearly shows the effect in the growth chart.
How does inflation affect my returns?
Inflation reduces the purchasing power of your capital. To get the real return, subtract the inflation rate from the nominal return. If your investment returns 7% and inflation is 3%, the real return is about 4%. This calculator shows nominal returns.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double an investment. Divide 72 by the annual interest rate: at 6%, it takes about 12 years (72÷6=12). It works best with rates between 4% and 12%. For lower rates, use the Rule of 69.3.
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