Compound Interest Calculator
Calculate how your savings and investments grow with compound interest. Add regular contributions, set annual increases, adjust for inflation, and see a full growth chart and year-by-year table.
Quick scenarios
Support Our Free Tools
If you find this calculator helpful, please consider supporting our work. Your contribution helps us build and maintain these free tools for everyone.
Buy me a coffeeWhat Is Compound Interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods — often called "interest on interest." Unlike simple interest (which only applies to the original amount), compound interest causes your balance to grow at an accelerating rate, creating the famous exponential growth curve.
A = P × (1 + r/n)nt
A = Final balance (future value)
P = Principal (initial investment)
r = Annual interest rate (decimal)
n = Compounding periods per year
t = Time in years
Compounding Frequency Comparison
$10,000 at 8% over 10 years — how much does frequency matter?
| Frequency | n/year | Final Balance | Interest | Effective APY |
|---|---|---|---|---|
| Annually | 1 | $21,589 | +$11,589 | 8.000% |
| Semi-Annually | 2 | $21,911 | +$11,911 | 8.160% |
| Quarterly | 4 | $22,080 | +$12,080 | 8.243% |
| Monthly | 12 | $22,196 | +$12,196 | 8.300% |
| Weekly | 52 | $22,231 | +$12,231 | 8.322% |
| Daily | 365 | $22,254 | +$12,254 | 8.328% |
The Power of Starting Early
Same $300/month at 8%, different start ages — all stopping at 65:
| Start Age | Years | Total Deposited | Final Balance | Multiplier |
|---|---|---|---|---|
| 20 | 45 | $162,000 | $1,348,180 | 8.3× |
| 25 | 40 | $144,000 | $932,887 | 6.5× |
| 30 | 35 | $126,000 | $642,369 | 5.1× |
| 35 | 30 | $108,000 | $435,954 | 4.0× |
| 40 | 25 | $90,000 | $289,887 | 3.2× |
| 45 | 20 | $72,000 | $185,921 | 2.6× |
Rule of 72 Reference
Years to double = 72 ÷ Annual Rate
| Rate | Rule of 72 | Actual | Typical investment |
|---|---|---|---|
| 2% | 36 yrs | 35 yrs | Basic savings |
| 4% | 18 yrs | 17.7 yrs | High-yield savings / CDs |
| 6% | 12 yrs | 11.9 yrs | Conservative portfolio |
| 8% | 9 yrs | 9 yrs | Balanced portfolio |
| 10% | 7.2 yrs | 7.3 yrs | S&P 500 historical avg |
| 12% | 6 yrs | 6.1 yrs | Aggressive growth |
Frequently Asked Questions
- What is compound interest in simple terms?
- Compound interest is "interest on interest." Your investment earns interest, that interest is added to your balance, and then next period you earn interest on the new larger total. Over time this creates exponential snowball growth — slow at first, then accelerating dramatically.
- What is the difference between APR and APY?
- APR (Annual Percentage Rate) is the simple annual rate without compounding. APY (Annual Percentage Yield) includes the compounding effect and is always slightly higher than APR when interest compounds more than once per year. APY gives a more accurate picture of your actual annual return.
- Which compounding frequency is best?
- Daily compounding produces the highest return, but the difference between daily and monthly is tiny. On $10,000 at 8% over 10 years, daily vs monthly compounding differs by only ~$58. Rate and time are far more impactful than frequency.
- How does inflation affect compound interest?
- Inflation erodes purchasing power. If your investment grows at 8% and inflation is 3%, your real return is approximately 5%. The calculator shows what your final balance would be worth in today's dollars when you enter an inflation rate.
- How do I model retirement income (withdrawals)?
- Use the Regular Withdrawals section. Enter your desired monthly income and the withdrawal frequency. The calculator tracks whether your balance sustains those withdrawals over the full period and shows a depletion warning if not. You can also add an annual withdrawal increase to model inflation-adjusted income.
- What is a realistic rate of return?
- High-yield savings: 4–5%. CDs: 4–5.5%. Bonds: 3–6%. Balanced portfolio: 6–8%. S&P 500 historical long-term average: ~10%. For conservative financial planning, 6–7% is a common assumption for a diversified equity portfolio.
- Should I use beginning or end of period for contributions?
- "Beginning of period" (annuity due) means contributions go in at the start and immediately start earning interest — e.g. paycheck deposited on the 1st. "End of period" (ordinary annuity) contributions arrive at the end — e.g. an employer pension contribution after month close. Beginning slightly outperforms end.
- Does compound interest work against me on debt?
- Yes — powerfully. Credit card debt at 20–29% APR doubles every 3–4 years. Paying off high-interest debt delivers a guaranteed "return" equal to your interest rate, which often beats investment returns on a risk-adjusted basis.
Explore All Tools
82 free tools — no signup required
All 82 tools are free · No signup · No ads