Compound Interest Calculator
See how savings grow with compound interest over time.
See the power of compounding. Enter your starting amount, interest rate, time and compounding frequency to watch savings grow — and how much of the final balance is pure interest.
Formula / method
Examples
≈ 1,647
≈ 19,348
Why compounding beats simple interest
Compound interest pays interest on your interest. After the first period your balance is larger, so the next interest payment is calculated on that larger amount, and the effect snowballs. Over long periods this curve pulls dramatically away from simple interest, which only ever pays on the original principal.
How often it compounds changes the result
The compounding frequency — yearly, quarterly, monthly or daily — matters. More frequent compounding means interest is added and starts earning sooner, so the final balance is a little higher for the same nominal rate. This tool lets you set the frequency and see the difference.
Time is the most powerful ingredient: starting earlier, even with smaller amounts, usually beats starting later with more, because the compounding has longer to work.
Where it's used
- Projecting how savings or investments grow as returns are reinvested over years
- Comparing accounts with different compounding frequencies, such as daily versus monthly
- Estimating retirement-fund growth from regular contributions
- Seeing how an unpaid credit-card balance snowballs when interest compounds
- Modeling how an initial deposit grows toward a savings goal
Real-world examples
- $10,000 invested at 7% compounded annually growing to about $19,672 in 10 years
- Comparing $5,000 at 5% compounded monthly versus annually over 20 years
- Seeing how a $2,000 credit-card balance at 22% APR grows if left unpaid
Did you know?
The 'Rule of 72' lets you estimate doubling time in your head: divide 72 by the interest rate, so money at 6% doubles in about 12 years. The shortcut was already written down by Italian mathematician Luca Pacioli in his 1494 book Summa de Arithmetica.
FAQ
What does compounding frequency change?
More frequent compounding earns slightly more, because interest starts earning its own interest sooner. The difference between monthly and daily is usually small.