Calculate how your investment grows over time with the power of compound interest. Enter your principal, interest rate, compounding frequency, and time period to see your final balance.
Compound interest means you earn interest on your interest. Each period, the interest earned is added to your balance, and the next period’s interest is calculated on that larger amount. Over time this creates exponential growth — often called the “eighth wonder of the world.”
A = P (1 + r/n)^(nt)
For continuous compounding: A = Pe^(rt)
| Principal | Rate | Frequency | Years | Final Balance | Interest Earned |
|---|---|---|---|---|---|
| $10,000 | 7% | Monthly | 10 | $20,097 | $10,097 |
| $5,000 | 5% | Annually | 20 | $13,266 | $8,266 |
| $1,000 | 10% | Quarterly | 5 | $1,639 | $639 |
| $50,000 | 4% | Monthly | 30 | $164,917 | $114,917 |
Simple interest is calculated only on the original principal each period. Compound interest is calculated on the principal plus all previously earned interest. Over long periods, compound interest grows significantly faster.
The more frequently interest compounds, the faster your money grows — though the difference between monthly and daily is small. For example, $10,000 at 7% for 10 years: annually = $19,672; monthly = $20,097; daily = $20,136.
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 7%, money doubles in about 72 ÷ 7 = 10.3 years. It’s a quick mental math shortcut for compound interest.
Continuous compounding is the mathematical limit where interest compounds infinitely often. It uses the formula A = Pe^(rt) where e ≈ 2.718. In practice, daily compounding is very close to continuous compounding.
Yes. Compound interest on debt (credit cards, loans) works the same way but against you — unpaid balances grow exponentially. That’s why paying off high-interest debt quickly saves significantly more than the face value of the interest rate suggests.