Compound Interest Calculator
Watch interest earn interest — project how a balance grows over years of compounding.
This compound interest calculator projects how a starting balance grows when interest is added to the balance and then itself earns interest. Enter your principal, annual rate, time horizon, and compounding frequency, and you instantly see the future value and how much of it is pure interest.
Compounding is quiet at first and dramatic later. 1,000 at 7% grows to about 1,967 in 10 years — but to roughly 7,612 in 30. The last decade adds more than the first two combined, which is why starting early matters more than starting big. The calculator makes that curve concrete with your own numbers.
It is free, instant, and private: every projection is computed in your browser and nothing is uploaded.
How to calculate compound interest
- Enter the starting amount (the principal).
- Enter the annual interest rate.
- Set the number of years to project.
- Choose how often interest compounds — yearly, monthly, or daily.
- Read the future value and total interest earned; adjust any input to explore scenarios.
Compound vs simple interest, and the rule of 72
Simple interest pays only on the original principal: 1,000 at 5% simple earns a flat 50 every year. Compound interest pays on principal plus accumulated interest, so each year's gain is a little bigger than the last. Over one year they look identical; over 20 years the gap is enormous.
For a quick mental check, divide 72 by the interest rate to estimate how many years a balance takes to double: at 6%, about 12 years; at 9%, about 8. The calculator gives the exact figure, but the rule of 72 is a good sanity test.
What the calculator computes
It evaluates A = P(1 + r/n)^(nt): the principal P grows by the periodic rate r/n across nt compounding periods. The result A is the future value, and subtracting P leaves the total interest earned. Increasing n (more frequent compounding) or t (more years) both raise A, but time has by far the larger effect.
The engine converts your annual rate and chosen frequency into a per-period rate, then applies it repeatedly. Because each period's interest joins the balance before the next is calculated, growth accelerates over time — the defining behaviour of compounding versus a flat, one-off interest payment.
A worked example over 20 years
Put 5,000 in at 6% compounded monthly for 20 years and the balance grows to about 16,551 — you contributed 5,000 and compounding added roughly 11,551. More than two-thirds of the final pot is interest, none of it from extra deposits.
Split the timeline and the acceleration is obvious: after 10 years the balance is about 9,097 (up 4,097), but the second decade adds about 7,454. The same principal and rate produce a bigger gain in the later years purely because the base it compounds on has grown larger.
Reading the future value
The headline number is the future value; the more revealing figure is the interest portion. Watch how the interest-to-principal ratio climbs as you extend the years — it is the clearest illustration of why time in the market tends to beat the size of the initial deposit.
If the total looks implausibly large, sanity-check the rate. Long-run stock returns average high single digits before inflation, so a projection built on 12–15% will look spectacular but is unlikely to hold up across decades.
Factors that change the outcome
Rate and time dominate. Doubling the years does far more than doubling the rate, and the effect is non-linear because it compounds. Compounding frequency helps at the margin — daily beats yearly — but the improvement shrinks quickly and is minor next to a higher rate or a longer horizon.
The starting principal scales the whole result proportionally: double the principal and you double the future value at any given rate and term. That is why regular contributions, though not modelled here directly, are so powerful — each new deposit starts its own compounding clock.
Assumptions, rounding, and real-world gaps
The projection assumes a single lump sum, a constant rate every year, and no withdrawals — a clean model that reality rarely matches. Investment returns swing year to year and can be negative, and savings rates change with the market. Treat the curve as an illustration of the mechanism, not a forecast.
Figures are gross and nominal: they ignore tax on interest and the eroding effect of inflation. A 7% nominal return with 3% inflation is closer to 4% in real spending power, so your true outcome will feel smaller than the headline number suggests.
Related calculations
The reverse of compounding is amortization — paying down a debt rather than growing a balance — which our loan calculator handles. On debt, compounding works against you: credit-card interest compounds on unpaid balances the same way, which is why carrying a balance is so expensive.
To gauge how long a goal takes, use the rule of 72 as a first pass, then refine here. Dividing 72 by your rate estimates the doubling time; the calculator then pins down the exact year your target balance is reached.
Frequently asked questions
Is this compound interest calculator free?
Yes — free, unlimited, and no sign-up. All calculations run locally in your browser.
What formula is used?
The standard compound interest formula A = P(1 + r/n)^(nt), where P is principal, r the annual rate, n the number of compounding periods per year, and t the years.
Does compounding frequency really matter?
It helps, but less than people expect. 10,000 at 5% for 10 years gives about 16,289 with annual compounding and about 16,470 with monthly. Rate and time matter far more than frequency.
Is this financial or investment advice?
No. It is an educational projection assuming a constant rate. Real investment returns vary year to year and can be negative, and savings rates change. Treat results as illustrations, not promises, and speak to a qualified adviser for decisions.
Does the calculator account for tax or inflation?
No. Results are gross nominal figures. Tax on interest and inflation both reduce real-world growth, so your effective outcome will be lower than the headline number.
Can I model regular monthly deposits?
The core projection starts from a single principal. To approximate regular contributions, run the calculation on your average balance, or project each year's deposits separately and sum them.