Compound Interest Calculator
Calculate how an investment grows over time with compound interest. Supports different compounding frequencies and regular monthly contributions.
Enter investment details to see growth.
Final balance
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Total invested
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Interest earned
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Effective APY
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Growth table
Year-by-year growth.
| Year | Deposited | Interest | Balance |
|---|
Formula
The compound interest formula.
Without contributions
A = P × (1 + r/n)^(n×t)
With monthly contributions (PMT)
A = P×(1+r/n)^(nt) + PMT×[((1+r/12)^(12t)−1)÷(r/12)]
- A
- Final amount
- P
- Principal (initial investment)
- r
- Annual interest rate (decimal)
- n
- Compounding periods per year
- t
- Time in years
- PMT
- Monthly contribution
FAQ
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 on principal only), compound interest grows exponentially over time.
How does compounding frequency affect growth?
More frequent compounding produces slightly more growth. $10,000 at 10% for 10 years: annually = $25,937; monthly = $27,070; daily = $27,179. The difference grows larger over longer periods and higher rates.
What is the Rule of 72?
Divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 8%: 72 / 8 = 9 years to double. At 6%: 72 / 6 = 12 years. It's a quick mental approximation.
What is APY vs APR?
APR (Annual Percentage Rate) is the stated rate without compounding. APY (Annual Percentage Yield) includes compounding effects. APY is always >= APR when compounding more than once per year. Banks advertise APY for savings, APR for loans.
How do regular contributions affect compound growth?
Regular contributions dramatically accelerate growth. A $10,000 initial investment at 8% for 30 years grows to ~$100k. Adding $200/month makes it ~$372k. The earlier each contribution is made, the longer it compounds.
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