Compound Interest Calculator
See how your investments grow over time
Initial Investment
$
$
%
Final Amount
$106639.02
Total Contributions
$70000.00
Total Interest Earned
$36639.02
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How to Use This Calculator
Enter your initial principal, expected monthly contribution, annual interest rate, and the number of years you plan to invest. You can also select the compounding frequency (how often interest is calculated and added to your balance).
Formula
Compound interest is calculated using the formula:
A = P(1 + r/n)^(nt)
Where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.
Example
If you invest $10,000 at a 7% annual interest rate compounded monthly, and add $500 each month for 10 years, your final balance will be over $100,000, with more than $30,000 earned purely from interest!
Frequently Asked Questions
Compound interest is the interest on a deposit or loan calculated based on both the initial principal and the accumulated interest from previous periods. It's 'interest on interest'.
The more frequently interest is compounded (e.g., daily vs. annually), the higher the effective return. More frequent compounding means interest is added to the principal sooner, generating its own interest.
The Rule of 72 is a quick way to estimate how long it will take an investment to double. Simply divide 72 by the annual interest rate. For example, at an 8% return, your money doubles in about 9 years (72/8).
Because of compound interest, time is your greatest asset. Money invested earlier has more time to compound, which can result in dramatically larger final balances compared to investing larger amounts later in life.
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, resulting in exponential growth.