Compound interest grows your money on both the initial deposit and the interest already earned. Use this calculator to estimate how much an investment or savings account could grow over time.
How to use this calculator
- Enter the starting amount (principal) you plan to invest or save.
- Enter the annual interest rate as a percentage.
- Enter how many years the money will grow.
- Select how often interest is compounded (annually, quarterly, or monthly).
- Review the final amount and total interest earned.
Formula
The compound interest formula is A = P × (1 + r/n)^(n×t), where A is the final amount, P is the principal, r is the annual interest rate as a decimal, n is the number of times interest compounds per year, and t is the number of years.
Example
If you invest $10,000 at 5% annual interest compounded monthly for 10 years, your balance grows to about $16,470, earning roughly $6,470 in interest.
Frequently asked questions
- What is compound interest?
- Compound interest is interest calculated on the initial principal and on accumulated interest from previous periods. It causes savings to grow faster than simple interest.
- How does compounding frequency affect returns?
- More frequent compounding (e.g. monthly vs annually) leads to slightly higher returns because interest is added to the balance more often.
- What is the compound interest formula?
- A = P × (1 + r/n)^(n×t), where A is the final amount, P is principal, r is the annual rate as a decimal, n is compounding periods per year, and t is years.
- How much will $10,000 grow in 10 years?
- At 5% compounded monthly, $10,000 grows to about $16,470 in 10 years. Actual results depend on your rate, compounding frequency, and whether you add contributions.
- Is compound interest the same as APY?
- APY (annual percentage yield) reflects compounding in a single yearly rate. This calculator lets you set principal, rate, term, and compounding frequency separately.
- Does compound interest work for debt too?
- Yes. Credit card balances compound against you when unpaid interest is added to the balance. The same math applies in reverse for borrowers.
- How long does it take to double my money?
- The Rule of 72 estimates doubling time: divide 72 by your annual rate. At 6%, money roughly doubles in 12 years. Actual timing depends on compounding frequency.
- Should I use compound interest for retirement planning?
- Compound growth is central to long-term investing, but retirement projections should also include regular contributions, inflation, taxes, and realistic return assumptions.
- What rate should I use for savings vs investments?
- High-yield savings might use 4–5%. Long-term stock portfolios are often modeled at 5–7%, but returns vary and are not guaranteed.
- Can I add monthly contributions in this calculator?
- This version models a single starting deposit. For monthly contributions, use the Monthly Savings or Retirement Savings calculators.