Compound Interest Calculator
Calculate compound interest on investments and savings. Compare compounding frequencies and see the power of reinvested returns over time.
Last updated: April 2026
Final Amount
$0
Total Invested
$0
Interest Earned
$0
Interest % of Total
0.0%
| Year | Opening Balance | Contributions | Interest | Closing Balance |
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What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, it grows exponentially, making it one of the most powerful forces in personal finance.
The longer your money compounds and the higher the frequency of compounding, the faster your wealth grows. Even small differences in rate or time period produce dramatically different outcomes over decades.
How to use this calculator
- 1Enter principal — Input the initial amount you are investing or depositing.
- 2Set interest rate — Enter the annual interest rate or expected return rate.
- 3Choose compounding frequency — Select how often interest compounds: annually, quarterly, monthly, or daily.
- 4Set time period — Enter the number of years you will leave the money invested.
Formula & example
A = P x (1 + r/n)^(n x t) | Growth = A - P
Example: Invest 10,000 at 8% annual interest compounded monthly for 20 years. A = 10,000 x (1 + 0.08/12)^(12 x 20) = 49,268. Total growth = 39,268.
Benefits
Visualise exponential growth
See how your investment grows slowly at first, then accelerates dramatically in later years.
Compare compounding frequencies
Understand how daily compounding outperforms annual compounding over long periods.
Plan long-term savings
Model savings accounts, fixed deposits, bonds, and investment portfolios.
Include regular contributions
Add monthly contributions to see the combined impact of compound growth and regular saving.
Use cases
Savings account growth
Calculate how much a bank savings account or FD will grow over time.
Investment portfolio
Model stock market returns compounded over a 20-30 year investment horizon.
Education fund
Project how much to save monthly to reach a college education fund target.
Retirement planning
Estimate your retirement corpus based on current savings and expected returns.
Frequently asked questions
What is the difference between simple and compound interest?+
Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus all previously earned interest. Over long periods, compound interest grows dramatically faster.
How often should interest compound?+
More frequent compounding produces slightly higher returns. Daily compounding is marginally better than monthly, which is better than annual. For long-term investments, the compounding frequency matters less than the rate and time period.
What is the Rule of 72?+
The Rule of 72 is a quick estimate: divide 72 by the annual interest rate to find approximately how many years it takes to double your money. At 8% interest, money doubles in roughly 9 years.
Does compound interest apply to loans too?+
Yes. Compound interest works against you on loans. Credit card debt, for example, compounds monthly, which is why balances can grow very quickly if not paid off.
What is the effective annual rate?+
The effective annual rate (EAR) is the actual return after accounting for compounding within the year. For example, 12% compounded monthly has an EAR of 12.68%, slightly higher than the nominal rate.