Compound Interest Calculator
Enter your principal, interest rate, compounding frequency, and time period to see exactly how your investment or savings grows — year by year.
What is Compound Interest?
Compound interest is interest calculated on both the initial principal and all accumulated interest from previous periods. Unlike simple interest (which only accrues on the principal), compound interest grows exponentially — your earnings generate their own earnings over time.
The Compound Interest Formula
A = P × (1 + r/n)^(n×t)
Where A = final amount, P = principal, r = annual interest rate (decimal), n = compounding periods per year, t = time in years. More frequent compounding (higher n) yields slightly more growth.
The Power of Long-Term Investing
- Start early — time is the most powerful variable. 10 years at 8% more than doubles your money.
- Reinvest earnings — never withdraw interest; let it compound to maximize growth.
- Higher frequency matters over decades — daily compounding beats annual compounding most over 30+ years.
- Small rate differences are huge — 6% vs 8% over 30 years is a 60%+ difference in final value.
Frequently Asked Questions
Compound interest is interest earned on both your principal and previously accumulated interest. It grows exponentially rather than linearly — this is why long-term investing is so powerful.
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 8%, 72 ÷ 8 = 9 years. It's a quick mental shortcut that's surprisingly accurate for typical investment rates.
Yes, but the difference is less dramatic than most people expect. Going from annual to monthly compounding at 8% over 10 years adds a few hundred dollars on a $10,000 investment. Over 30 years, the difference becomes more meaningful — but choosing to invest at all matters far more than compounding frequency.
This calculator shows how an investment or savings account grows with no withdrawals. The loan/EMI calculator shows how a debt shrinks with regular monthly payments. Both use compound interest math, but in opposite directions.