Compound Interest Calculator
See how your money grows with compound interest. Set your initial investment, interest rate, monthly contributions, and compounding frequency to visualize long-term growth.
Final Balance
$54,714
Total Contributions
$34,000
Total Interest
$20,714
Growth Over Time
How to Use
- Enter your initial investment (principal) amount.
- Set the annual interest rate and choose a compounding frequency (daily, monthly, quarterly, etc.).
- Enter the number of years and any recurring monthly contribution.
- View your final balance, total interest earned, and the interactive growth chart showing contributions vs. interest over time.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (calculated only on the principal), compound interest allows your money to grow exponentially over time — often called "interest on interest."
How does compounding frequency affect returns?
More frequent compounding (e.g., daily vs. annually) results in slightly higher returns because interest is calculated and added to the balance more often. However, the difference between monthly and daily compounding is usually small. The biggest impact comes from the interest rate and time invested.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by the annual interest rate. For example, at 8% interest, your money doubles in approximately 72 ÷ 8 = 9 years. This rule works best for rates between 4% and 12%.
How do monthly contributions affect growth?
Regular monthly contributions can dramatically increase your final balance through dollar-cost averaging. Even small monthly contributions compound over time. For example, $200/month at 7% over 30 years grows to over $227,000 — with only $72,000 contributed.