Enter your starting amount, interest rate, and time period, then click Calculate to see how your money grows.
Compound interest is often called the eighth wonder of the world — and for good reason. Unlike simple interest, which only earns returns on your original amount, compound interest earns returns on your returns too.
Each period, the interest you earned last period gets added to your balance. The next period, you earn interest on a bigger number. This snowball effect becomes more powerful the longer it continues.
The key variables are your principal (starting amount), the interest rate, the compounding frequency, and most importantly — time. Even a small difference in rate or a few extra years can mean tens of thousands of dollars over a lifetime of saving. To see how a lump sum or recurring investment expands over time, try the compound growth calculator.
The standard formula: A = P × (1 + r/n)n×t
Example: $5,000 at 7% compounded monthly for 10 years:
A = 5000 × (1 + 0.07/12)^(12×10) = $10,048. Your money roughly doubled! If you hold bonds, the r in this formula comes from the bond's coupon rate — use the coupon rate calculator to find that figure before plugging it in.
The Rule of 72 is a simple shortcut to estimate how many years it takes to double your money at a given interest rate: Years to double ≈ 72 ÷ Annual Rate (%)
| Annual Rate | Years to Double | Actual Years |
|---|---|---|
| 2% | 36 years | 35.0 |
| 4% | 18 years | 17.7 |
| 6% | 12 years | 11.9 |
| 7% | 10.3 years | 10.2 |
| 8% | 9 years | 9.0 |
| 10% | 7.2 years | 7.3 |
| 12% | 6 years | 6.1 |
Based on annual compounding. Monthly compounding will be slightly faster.
More frequent compounding means interest is added to your balance more often, so it starts earning interest sooner. The difference between annual and monthly is meaningful; the difference between daily and monthly is very small.
| Frequency | $10k at 6% for 10 yrs | Interest Earned |
|---|---|---|
| Annually | $17,908 | $7,908 |
| Semi-Annually | $18,061 | $8,061 |
| Quarterly | $18,140 | $8,140 |
| Monthly | $18,194 | $8,194 |
| Daily | $18,220 | $8,220 |
The rate matters far more than frequency. Focus on getting the highest rate you can. Keep in mind that fund fees quietly reduce your effective rate each year — the expense ratio calculator shows exactly how much those costs chip away from long-term growth.
How a $10,000 lump sum grows at different interest rates over time, compounded monthly.
| Rate | 5 Years | 10 Years | 15 Years | 20 Years | 25 Years | 30 Years |
|---|
Formula: A = 10,000 × (1 + r/12)^(12×t). No additional contributions. Higher rates + longer time = dramatic exponential growth.
How much more you earn by compounding more frequently at the same rate.
| Frequency | Times/Year | Final Balance | Interest Earned | Extra vs Annual | Effective Rate |
|---|
Effective Annual Rate = (1 + r/n)^n − 1. The gap between daily and annual compounding is meaningful but far smaller than the rate itself.
Final balance when adding a fixed monthly deposit on top of an initial $1,000 investment.
| Monthly Contribution | 5 Years | 10 Years | 20 Years | 30 Years | Total Invested |
|---|
Based on monthly compounding at 7% p.a. "Total Invested" is at 30 years. The interest earned on top of that is the compounding magic.
Net final balance after paying annual tax on interest earned, compounded monthly.
| Gross Rate | No Tax | 10% Tax | 15% Tax | 20% Tax | 25% Tax | 30% Tax |
|---|
Tax reduces the effective interest rate each year. Net rate ≈ gross rate × (1 − tax rate). Tax rules vary by country and account type — tax-advantaged accounts avoid this drag.
Exact doubling time using the compound interest formula (monthly compounding) versus the Rule of 72 shortcut.
| Annual Rate | Rule of 72 Estimate | Exact (Monthly) | Exact (Annual) | $10k becomes | $50k becomes |
|---|
Rule of 72 is a fast mental math shortcut. Exact figures use ln(2) ÷ ln(1+r/n) × n for monthly compounding. Error is usually under 1%.
How much more compound interest earns versus simple interest at the same rate over long periods.
| Rate | 10 Yrs Simple | 10 Yrs Compound | 20 Yrs Simple | 20 Yrs Compound | 30 Yrs Simple | 30 Yrs Compound |
|---|
Compound interest uses monthly compounding. Simple interest formula: A = P × (1 + r × t). The gap between the two widens dramatically over time and at higher rates.