Compound Interest Calculator
Unlock the "eighth wonder of the world." Calculate how your money grows exponentially when your interest earns interest.
Total Interest Earned: 0
Final Maturity Value: 0
How to Use the Compound Interest Calculator
To see your investment grow, enter your Principal Amount (the starting money). Input the Annual Interest Rate and the Time Period in years. Finally, choose the Compounding Frequency—this is how often the interest is added back to your balance. The more frequently your money compounds (e.g., monthly vs. annually), the more interest you will earn over the long term.
Frequently Asked Questions
What is Compound Interest? +
Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. Essentially, it is "interest on interest," which allows wealth to grow much faster than simple interest.
How does frequency affect my returns? +
The higher the compounding frequency, the higher the final amount. For example, $10,000 at 10% for 1 year compounded annually gives you $1,000 in interest. If compounded monthly, it gives you approximately $1,047, because you earn interest on the interest added each month.
What is the "Rule of 72"? +
The Rule of 72 is a quick formula to estimate how long it takes to double your money with compound interest. Simply divide 72 by your annual interest rate. For example, at a 10% rate, your money doubles in about 7.2 years (72 / 10 = 7.2).
Is compounding better for savings or loans? +
Compounding is fantastic for savings and investments because it builds wealth. However, it can be dangerous for loans and credit card debt, as the amount you owe can grow rapidly if not paid off quickly.
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