How to use the Compound Interest Calculator
Enter the initial amount, annual interest rate, years and compounds per year and the result appears straight away. Everything runs in your browser, so nothing you type is uploaded.
The power of compound interest
Compound interest means you earn interest on your interest. With simple interest, $1,000 at 5% earns $50 every year. With annual compounding, the second year earns 5% of $1,050, the third 5% of $1,102.50, and so on, so your savings grow over time faster and faster. The longer the money stays invested, the bigger that effect becomes, which is why starting early matters more than the exact rate.
Rate of return and compound frequency
Savings accounts usually quote an APY, which already includes compounding, while loans and some investments quote a nominal rate. Enter the nominal annual rate and the compound frequency here: 1 for yearly, 12 for monthly or 365 for daily. For investments that change in value, such as stock funds, the rate of return is an average, and real years will be higher or lower. This calculator works from a single initial deposit and does not add regular contributions.
The formula
A = P × (1 + r/n)^(n×t)
Examples
- $1,000 at 5% compounded monthly for 10 years
Final amount: 1,647.01 Interest earned: 647.01
- Same amount for 30 years
Final amount: 4,467.74 Interest earned: 3,467.74
- $10,000 at 7% compounded annually for 20 years
Final amount: 38,696.84 Interest earned: 28,696.84
Limitations and assumptions
Assumes a fixed nominal annual rate and no deposits, withdrawals, fees or taxes; not a return forecast.
Frequently asked questions
What is the compound interest formula?
A = P × (1 + r/n)^(n×t), with P the principal, r the annual rate, n compounds per year and t years.
Does compounding more often help?
Slightly. Monthly beats annual, but the gain from daily compounding over monthly is tiny.
What is the rule of 72?
Divide 72 by the annual rate to estimate years to double. At 6 percent, money doubles in about 12 years.
Does this include deposits or tax?
No. It models a single lump sum without fees or tax.