Compound Interest Calculator
See how your money grows over time with the power of compounding
Add a fixed amount every month on top of the principal
Each year the monthly top-up grows by this % (e.g. salary hike)
About the Compound Interest Calculator
The Compound Interest Calculator shows how an initial investment grows over time when interest is earned not just on the principal but also on accumulated interest — a phenomenon famously called the "eighth wonder of the world." It is especially useful for comparing different compounding frequencies and understanding how a longer time horizon dramatically amplifies wealth. Investors, savers, and students alike use it to visualise the exponential nature of compounding versus simple interest growth.
How to Use
- Enter the principal amount (your starting investment).
- Set the annual interest rate offered by the bank or instrument.
- Choose the time period in years you plan to keep the investment.
- Select the compounding frequency (monthly or quarterly is most common) and click Calculate.
Formula Used
A = maturity amount, P = principal, r = annual interest rate (decimal), n = compounding periods per year, t = time in years.
Understanding Your Results
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal (Interest = P × r × t). Compound interest is calculated on the principal plus previously accumulated interest, so each period your interest earns interest. Over 30 years at 8%, $10,000 grows to $34,000 (simple) vs $100,000 (compound) — over triple.
How does compounding frequency affect returns?
More frequent compounding (daily > monthly > quarterly > annually) yields slightly higher returns because each compounding event grows the next. The difference between annual and continuous compounding at 8% over 10 years is roughly 1.8% extra return.
Why is starting early so powerful?
A 25-year-old saving $200/month at 8% until 65 ends up with ~$700,000. Starting at 35 with the same contributions yields only ~$300,000 — less than half. Time is the single biggest lever in compounding, more important than rate or contribution size.
What is the Rule of 72?
A handy approximation for how long money takes to double: 72 ÷ rate% = years to double. At 6% returns, money doubles in 12 years; at 9%, in 8 years; at 12%, in 6 years. Useful for quick mental estimates without a calculator.
Important Note
The nominal interest rate (what banks advertise) differs from the effective annual rate, which reflects the real return once intra-year compounding is applied. Results assume a constant rate for the entire duration; actual returns on market-linked instruments will vary. Always read the terms of your financial product before investing.