Compound Interest Calculator

Written by Victor Alarcón, Investing & Funds Analyst Reviewed & fact-checked by Daniel Ferraro, Editor-in-Chief

📅 Published June 6, 2026 ✅ Fact-checked ⏱ 9 min read

How to use this calculator

1. Pick a mode. Use Grow my savings to project a future value, or Reach a goal to find out how much you need to invest each month to hit a target.
2. Enter your numbers. Set your starting amount, contribution, expected annual return and time frame. Choose your currency and how often interest compounds.
3. Read the results. See your future value, total invested, interest earned, effective APY and money multiplier, plus a growth chart and a year-by-year table.
4. Adjust for inflation to see what your balance is worth in today’s money, then copy a shareable link or print the results.

What is compound interest?

Compound interest is the interest you earn on both your original money and on the interest it has already earned. Instead of growing in a straight line, your balance grows faster and faster over time because each new interest payment is added to the principal and then earns interest itself. According to the U.S. Securities and Exchange Commission’s Investor.gov, this “interest on interest” is what makes long-term investing so powerful — and why starting early matters so much.

The opposite is simple interest, which is calculated only on your original principal. With simple interest, $10,000 at 5% earns a flat $500 every year. With compound interest, year two earns interest on $10,500, year three on more than that, and so on. Over decades, the gap becomes enormous.

Think of it as a snowball: a small ball of money rolls downhill, picking up more snow (interest), and because it’s now bigger, it picks up even more on the next roll. Early on the growth looks slow and almost boring — then it curves sharply upward as the “interest on interest” takes over.

That late-stage acceleration is why the single most important decision is simply starting, and starting early.

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — an adage long associated with the power of compounding.

The compound interest formula

The standard compound interest formula is:

A = P (1 + r/n)^nt

• A — the final amount (future value)
• P — the principal (your starting amount)
• r — the annual interest rate, as a decimal (5% = 0.05)
• n — the number of times interest compounds per year
• t — the number of years

The interest earned alone is simply A − P. When you also add regular deposits, the future value of those contributions is added on top using the future-value-of-an-annuity formula — which is exactly what the calculator above does for you, period by period.

How to calculate compound interest (worked example)

Let’s calculate $15,000 at 15% compounded annually for 5 years (a popular textbook example):

1. Convert the rate: r = 0.15, and since it compounds annually, n = 1.
2. Apply the formula: A = 15,000 × (1 + 0.15/1)^1×5 = 15,000 × (1.15)⁵.
3. (1.15)⁵ ≈ 2.011357, so A ≈ 15,000 × 2.011357 ≈ $30,170.36.
4. Interest earned = $30,170.36 − $15,000 = $15,170.36.

In just five years the money more than doubled — without a single dollar of new contributions. That is the power of a high compounding rate over time.

Compounding frequency: daily, monthly, quarterly, annually

The more often interest compounds, the more you earn, because interest starts earning interest sooner. The difference between, say, monthly and daily compounding is real but usually small. Here is $10,000 at 6% for 10 years at different frequencies:

A daily compound interest calculator will always show slightly more than a monthly one, but notice how the gains shrink as frequency rises. Continuous compounding is the theoretical maximum and uses a different formula, A = Pe^rt, where e ≈ 2.71828.

One important tip for savers: when comparing savings accounts and CDs, look at the APY (annual percentage yield) rather than the nominal rate. APY already bakes in the compounding frequency, so it lets you compare accounts apples-to-apples — that is the “Effective APY” figure the calculator shows you.

Example outcomes: what compounding can do

How a one-time $10,000 investment grows with no extra contributions, compounded annually:

Want to see your own numbers, including monthly contributions? Adjust the calculator at the top of the page.

Simple vs compound interest

Over $10,000 at 5% for 30 years:

• Simple interest: $10,000 + (30 × $500) = $25,000.
• Compound interest (annual): $10,000 × (1.05)³⁰ ≈ $43,219.

Same rate, same principal, same time — but compounding produces roughly $18,000 more. The longer the horizon, the wider this gap grows, as the chart below shows.

The Rule of 72: a 5-second shortcut

Want to estimate how long it takes your money to double without a calculator? Divide 72 by your interest rate:

Years to double ≈ 72 ÷ rate

At 6%, money doubles in about 12 years (72 ÷ 6). At 9%, about 8 years. At 2%, about 36 years. It is an approximation, but it is remarkably accurate for typical rates and a great way to sanity-check any investment.

CAGR: measuring compound growth backwards

The compound annual growth rate (CAGR) tells you the single annual rate that would have grown a starting value into an ending value. It is the reverse of the compound interest formula:

CAGR = (Ending ÷ Beginning)^1/years − 1

If an investment grew from $10,000 to $20,000 over 8 years, the CAGR is (20,000/10,000)^1/8 − 1 ≈ 9.05% per year. CAGR is the standard way to compare the long-run performance of funds, stocks, and portfolios.

Why time matters most

Because compounding accelerates, the years at the start are worth far more than the years at the end. Consider two savers who both earn 7% a year:

• Ava invests $300/month from age 25 to 35 (10 years, $36,000) — then stops and never adds another dollar.
• Ben waits, then invests $300/month from age 35 to 65 (30 years, $108,000).

At 65, Ava — despite investing a third as much — ends up with a balance in the same ballpark as Ben, purely because her money had an extra decade to compound. The lesson: time in the market beats the amount you invest. Try it yourself in the calculator above.

Compound interest in savings, CDs, 401(k)s and Roth IRAs

Compounding is the engine behind almost every long-term wealth-building tool:

• High-yield savings & money market accounts — interest typically compounds daily or monthly and is quoted as APY. Use the calculator as a savings account interest calculator by setting a modest rate and monthly deposits.
• Certificates of deposit (CDs) — a fixed rate compounds over the term; model one by setting contributions to “None”.
• Index funds (S&P 500, VOO) and mutual funds — reinvested dividends and price growth compound over decades. Historically the S&P 500 has returned roughly 10% per year before inflation (about 7% after), though returns are never guaranteed.
• 401(k)s and Roth IRAs — tax-advantaged growth lets compounding work without yearly tax drag, which can meaningfully increase your final balance. See the IRS retirement plans overview for contribution limits.
• Debt — compounding works against you on credit cards and loans, where unpaid interest is added to your balance.

Learn more in our guides on how to start investing, index funds and dollar-cost averaging, or browse Investing, Personal Finance and Retirement.

When compound interest works against you

Compounding is a double-edged sword. On debt — credit cards, some loans — unpaid interest is added to your balance and then charged interest itself, exactly like an investment in reverse. A credit card at 22% APR that compounds daily can balloon a balance frighteningly fast if you only make minimum payments.

To see the effect, enter your balance as the starting amount, your card’s APR as the rate, set contributions to “None” and daily compounding — the future value is what the debt grows to if left unpaid.

How this calculator compares to other tools

Popular compound interest calculators from Investor.gov, NerdWallet, Bankrate, Moneychimp and Ramsey Solutions all use the same underlying maths. What we add on top: a growth chart, an inflation toggle that shows today’s money, a goal-solving mode, multiple currencies, and a shareable link — with no sign-up, no ads and nothing stored. The numbers reconcile with the official SEC tool, so you can trust the output and keep all the extra flexibility.

Frequently asked questions

How much interest will I earn?

Enter your starting amount, contribution, rate and time frame in the calculator above. “Interest earned” is your future value minus everything you put in.

How is interest calculated?

Each compounding period, your balance is multiplied by (1 + r/n). The new interest is added to the balance, so the next period earns interest on a slightly larger amount — that compounding is what the formula A = P(1 + r/n)^nt captures.

How do I calculate the interest rate per month?

Divide the annual rate by 12 for a nominal monthly rate (6% ÷ 12 = 0.5% per month). For an exact effective monthly rate from a given compounding frequency, use (1 + EAR)^1/12 − 1, where EAR is the effective annual rate.

How often does compound interest compound?

It depends on the account. Many savings accounts compound daily, credit cards often compound daily, CDs may compound monthly or quarterly, and bonds often pay semi-annually. The more frequent the compounding, the higher the effective APY.

Is compound interest good or bad?

It is excellent when you are investing or saving, because it accelerates growth. It works against you on debt — the same maths means unpaid credit-card balances can snowball quickly.

What are the best compound interest accounts?

For safety and liquidity, high-yield savings accounts, money market accounts and CDs all pay compounding interest (compare by APY). For long-term growth, tax-advantaged accounts like a Roth IRA or 401(k) invested in low-cost index funds have historically compounded far faster — with more risk.

Is this calculator free?

Yes. It runs entirely in your browser, stores nothing, requires no sign-up, and is free to use.

Sources & further reading

• U.S. SEC / Investor.gov — Compound Interest Calculator
• Consumer Financial Protection Bureau (CFPB)
• Federal Reserve
• IRS — Retirement Plans (401(k), IRA)

About the author

Victor Alarcón is Investorium’s Investing & Funds Analyst, covering ETFs, index funds and long-term investing. This tool was fact-checked and reviewed by Daniel Ferraro, Editor-in-Chief. Meet the team →

This calculator and article are for general education only and are not financial advice. Investment returns are not guaranteed and you can lose money. See our editorial policy.