Compound Interest Calculator
See how your money grows with compound interest. Add regular contributions and watch the power of compounding over time. All calculations happen locally — nothing leaves your browser.
How to Use the Compound Interest Calculator
- Enter initial principal — the starting amount of your investment.
- Set interest rate — the annual rate of return you expect.
- Choose compounding frequency — how often interest is calculated and added.
- Add monthly contributions — regular deposits to grow your investment faster.
- View the chart — see your money grow year by year.
The Power of Compound Interest
Compound interest is often called the "eighth wonder of the world." Unlike simple interest, which only earns on the principal, compound interest earns on both the principal and accumulated interest. This creates exponential growth over time.
The Rule of 72 is a quick way to estimate doubling time: divide 72 by your interest rate. At 7% annual return, your money doubles roughly every 10.3 years.
Frequently Asked Questions
Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus previously earned interest. Over long periods, compound interest grows significantly faster than simple interest.
More frequent compounding results in slightly higher returns. Daily compounding earns the most, but the difference between monthly and daily is small. What matters most is the rate and time horizon.
The S&P 500 has historically returned about 10% annually (7% after inflation). A 7% rate is a reasonable long-term estimate for a diversified stock portfolio. Past performance doesn't guarantee future results.
Use Cases
Retirement Savings Projection
Project how your retirement savings will grow over decades with compound interest and regular monthly contributions to plan your financial future.
Investment Growth Comparison
Compare different investment scenarios side by side to see how varying interest rates, time periods, and contribution amounts affect your returns.
Compound vs Simple Interest
Understand the dramatic difference between compound and simple interest to make informed decisions about savings accounts and investments.
Student Loan Accrual
Calculate how educational loan interest accrues over time to understand the true cost of student debt and plan repayment strategies effectively.
Savings Account Comparison
Compare savings account yields and CD rates to find the best place to park your money and maximize your interest earnings over time.