Compound Interest Calculator
Calculate compound interest on your investments. See total returns, interest earned, and growth over time.
* All calculations are approximate.
How Compound Interest Works?
Calculate compound interest on your investments. See total returns, interest earned, and growth over time.
Compound interest is calculated on both the initial principal and the accumulated interest from previous periods.
Unlike simple interest, your money grows exponentially as interest earns further interest over time.
The compounding frequency (monthly, quarterly, or annually) affects the total returns — more frequent compounding yields more.
The Rule of 72 gives a quick estimate: divide 72 by the interest rate to find how many years it takes to double your money.
Formula Used
A = P × (1 + r/n)^(n×t)
Where P = Principal, r = Annual interest rate, n = Compounding frequency per year, t = Time in years
Important — Read Before You Decide
- Compound interest works best with longer time periods
- Even a 1% difference in rate makes a huge difference over 20+ years
- Compounding frequency (monthly vs yearly) affects total returns
- Inflation reduces the real purchasing power of your returns
What Happens If You Ignore These?
- Losing out on exponential wealth growth by not investing early
- Simple interest accounts yield significantly less over time
- Withdrawing early breaks the compounding chain
Smart Tips
- Start investing as early as possible to maximize compounding
- Reinvest your returns instead of withdrawing
- Use the Rule of 72: divide 72 by interest rate to estimate doubling time
- Prefer quarterly or monthly compounding over annual
Frequently Asked Questions
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