About this tool
Project how a starting amount grows with compound interest, with optional regular monthly contributions and selectable compounding frequency (yearly, quarterly, monthly or daily). The output shows the final balance, total contributed and total interest earned.
Compounding means interest earns interest, which turns growth exponential rather than linear: the gains in later years dwarf the early ones, which is the entire argument for starting early. A useful shortcut is the Rule of 72 — divide 72 by the annual rate to estimate the years needed to double (72 ÷ 8% ≈ 9 years). This calculator is for illustration, not financial advice.
How to use it
- Enter the starting principal and optional monthly contribution.
- Set the annual rate, duration and compounding frequency.
- Read the final balance and how much of it is pure interest.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is earned only on the principal; compound interest is earned on principal plus previously earned interest, so it grows faster every period.
Does compounding frequency matter much?
Some — monthly compounding beats yearly at the same nominal rate, but the gap is modest. The rate and the time horizon matter far more.
What is the Rule of 72?
A mental shortcut: divide 72 by the annual growth rate to approximate the doubling time. At 6%, money doubles in roughly 12 years.