Personal Finance
Compound Interest Calculator
Einstein supposedly called it the eighth wonder of the world. See exactly what compounding does to your money.
Compound interest grows money by paying interest on interest: A = P(1 + r/n)^(nt), where P is principal, r the annual rate, n compounding periods per year, and t years. Compounding turns time into your biggest asset. Figures are estimates before taxes and fees — verify details with a licensed advisor where needed.
Formula: A = P(1+r/n)^(nt).
Monthly additions accelerate growth.
Start early, time beats rate.
Calculate Your Compound Interest
Future Value
What Is Compound Interest?
Compound interest pays interest on previously earned interest, so growth accelerates over time, the curve bends upward, not straight.
The calculator models both streams: a lump sum compounding at your chosen frequency, and monthly additions compounding alongside it.
How It Is Calculated
A = P(1 + r/n)^(nt) + monthly additions stream
Example: Example: $10,000 + $200/month at 5% for 20 years → ≈ $109,000 (≈ $51k of it interest)
The same $200/month at 5%
| Years | Balance |
|---|---|
| 10 | $31,100 |
| 20 | $82,200 |
| 30 | $166,900 |
| 40 | $305,900 |
Limitations
- Rates are nominal, subtract inflation (~2–3%) for real terms.
- Market returns vary; fixed-rate accounts differ from investment projections.
- Taxes on interest reduce effective compounding.
Sources & Review
References used for this calculator’s formulas and thresholds:
Compound Interest FAQ
How does compound interest work?
Each period, interest is calculated on principal + all previously earned interest, so the growth rate applies to an ever-larger base.
What's the Rule of 72?
Divide 72 by the annual rate to estimate doubling time: at 6%, money doubles in ~12 years.
Is monthly compounding better than annual?
Slightly, more frequent compounding earns interest on interest sooner. The gap widens at higher rates.
Why is time more powerful than rate?
Because compounding is exponential in time but only linear in rate, starting 10 years earlier beats a 2% higher rate over a lifetime.
A note before you begin: this tool offers educational estimates only. It cannot replace advice from a qualified professional.