Compound Interest Calculator
See how your money grows with compound interest. Add regular contributions to model savings, investments, or retirement.
$10,000 at various rates & time periods
Year-by-year growth table
| Year | Balance | Interest Earned | Total Contributions |
|---|
Compound vs simple interest
At the same rate, compound interest grows — more than simple interest over — years. Simple interest only earns on the original principal; compound interest earns on all accumulated interest too.
Rule of 72
At —% per year, your money doubles approximately every — years (72 ÷ rate = doubling time).
Frequently asked questions
What is compound interest?
Interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (only on principal), compound interest causes exponential growth over time — the longer you wait, the faster it grows.
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 7% annual return, money doubles in roughly 72 ÷ 7 ≈ 10.3 years. It's a handy mental shortcut for comparing investment options.
How does compounding frequency affect growth?
More frequent compounding yields slightly more. $10,000 at 7% for 10 years: annual = $19,672; monthly = $20,097; daily = $20,137. The difference matters more at higher rates and longer periods.
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P = principal, r = annual rate as decimal, n = compounds per year, t = years. With regular contributions C per period: add FV of annuity = C × ((1 + r/n)^(nt) − 1) / (r/n).
What is a realistic return on investment?
The US stock market (S&P 500) has historically averaged roughly 7–10% annually before inflation. Savings accounts are currently 4–5%. Bonds typically 3–5%. Your actual returns depend on asset allocation and market conditions.
How do monthly contributions affect growth?
Regular contributions dramatically accelerate growth. $200/month at 7% for 30 years: contributions total $72,000 but the compound final value approaches $243,000 — the extra $171,000 is pure interest. Starting early matters far more than the amount.