What is compound interest?
Compound interest means you earn interest not only on the money you started with but also on the interest already added. Each time interest is added, the balance grows, and the next round of interest is calculated on that larger balance. Over many years this snowball effect can make savings and investments grow much faster than simple interest.
This calculator shows the final amount, the total you paid in and how much came from interest. You can add a regular monthly deposit and choose how often interest is compounded.
The formula and a worked example
The basic formula is A = P x (1 + r/n)^(n x t), where P is the starting amount, r is the yearly rate as a decimal, n is how many times interest compounds each year, and t is the number of years.
Example: 100,000 invested at 10 percent for 10 years, compounded monthly, grows to about 270,704. With yearly compounding it grows to about 259,374. The extra is the effect of earning interest on interest more often.
The rule of 72
A quick mental shortcut is the rule of 72. Divide 72 by the yearly rate to estimate how many years it takes money to double. At 8 percent, money doubles in roughly nine years. The shortcut is only an estimate, but it shows why starting early matters so much.
How to use the calculator
- Enter your starting amount and an optional monthly deposit.
- Type the yearly interest rate and the number of years.
- Choose how often interest is compounded.
- Press Calculate to see the final amount, your deposits and the interest earned.
Practical tips
- Start early. Time usually matters more than the size of the deposit.
- Even a small monthly deposit adds up over many years.
- Remember that fees, taxes and inflation reduce real returns, and these are not included here.
- Treat the result as an estimate. Real investments rise and fall, and rates are not guaranteed.
More features
You can now add an expected inflation rate to see what your final amount is really worth in today’s money. The tool also shows a year by year table with bars, and an estimate of how long your money takes to double.
Frequently asked questions
What does compounding frequency mean?
How often interest is added to your balance, such as yearly, monthly or daily.
Is more frequent compounding always better?
It earns slightly more, but the rate and the time matter far more than the frequency.
Are taxes and fees included?
No. Subtract them yourself for a realistic picture.
Is the rate guaranteed?
No. The calculator assumes the same rate every year, which real investments rarely do.
Is my data saved?
No. Everything stays in your browser.