Compound Interest Calculator
Calculate compound interest on your investments. See how your money grows over time with different interest rates and compounding frequencies.
Investment Details
Enter your initial investment amount
Enter the annual interest rate
Enter the investment period in years
Choose how often interest compounds
Calculation Results
Year-by-Year Breakdown
| Year | Balance | Interest Earned |
|---|---|---|
| 1 | $10,511.62 | $511.62 |
| 2 | $11,049.41 | $1,049.41 |
| 3 | $11,614.72 | $1,614.72 |
| 4 | $12,208.95 | $2,208.95 |
| 5 | $12,833.59 | $2,833.59 |
| 6 | $13,490.18 | $3,490.18 |
| 7 | $14,180.36 | $4,180.36 |
| 8 | $14,905.85 | $4,905.85 |
| 9 | $15,668.47 | $5,668.47 |
| 10 | $16,470.09 | $6,470.09 |
How Compound Interest Works
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods.
Formula:
A = P(1 + r/n)^(nt)
- A = Final amount
- P = Principal (initial investment)
- r = Annual interest rate (as decimal)
- n = Number of times interest compounds per year
- t = Time in years
Example:
$10,000 invested at 5% annual interest, compounded monthly for 10 years:
A = 10,000(1 + 0.05/12)^(12×10) = $16,470.09
How to Use
- 1
Enter principal
Input your initial investment amount
- 2
Set interest rate
Enter the annual interest rate
- 3
Choose time period
Select investment period in years
- 4
Select compounding
Choose how often interest compounds
- 5
View results
See your final amount and interest earned
Frequently Asked Questions
What is compound interest?
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This creates a snowball effect where your money grows faster over time.
How does compounding frequency affect returns?
How does compounding frequency affect returns?
The more frequently interest compounds, the higher your returns. Daily compounding yields more than monthly, which yields more than annual compounding, though the differences become smaller at higher frequencies.
What is the Rule of 72?
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for an investment to double. Divide 72 by your annual interest rate to get the approximate years to double.
What is the difference between APR and APY?
What is the difference between APR and APY?
APR (Annual Percentage Rate) is the simple interest rate without compounding. APY (Annual Percentage Yield) includes the effect of compounding, showing your actual yearly return.