Investing
Compound Interest Calculator
See exactly how your money grows with compound interest. Adjust principal, interest rate, time period, and compounding frequency to visualize your investment growth.
Final balance
$167,072
Total interest
$109,072
Compound growth
Total contributed
$58,000
20 years
Return multiple
2.88×
Money multiplied
Growth Over Time
How Compound Interest Works
Compound interest earns interest on both your principal and previously earned interest. The formula is A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is years. Learn more about compound interest →
Questions, answered.
What is compound interest?
Compound interest is interest calculated on both the initial principal and the interest already earned. Unlike simple interest (calculated only on principal), compound interest causes your money to grow exponentially over time — Albert Einstein reportedly called it the eighth wonder of the world.
How is compound interest calculated?
The compound interest formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate (decimal), n is the number of times interest compounds per year, and t is the number of years.
How often should interest compound for maximum growth?
More frequent compounding produces slightly higher returns. Daily compounding yields more than monthly, which yields more than annually. However, the difference between daily and monthly compounding is small — the annual interest rate has a much larger impact on your returns.
What's a realistic interest rate to use?
For stocks/index funds, 7–10% historically (before inflation). For high-yield savings accounts, 4–5% currently. For bonds, 3–5%. For bank savings accounts, 0.5–2%. Always use conservative estimates for long-term planning.
How does regular investing affect compound growth?
Adding monthly contributions dramatically accelerates growth. For example, $10,000 invested at 8% for 30 years grows to $100,627. But adding just $200/month turns that into $338,000 — more than 3x as much, from contributing only $72,000 extra.