Compound Calculator
Calculate investment returns, compound growth, and portfolio performance.
Calculation Type
Investment Details
12 times per year
Additional Contributions
Advanced Options
Compound Interest Facts
- • Einstein called compound interest "the eighth wonder of the world"
- • Rule of 72: Divide 72 by interest rate to find doubling time
- • More frequent compounding yields slightly higher returns
- • Time in market beats timing the market
Future Value
After 10 years at 7%
Total Contributions
Principal + contributions
Total Interest
Compound growth
Contributions vs Interest
Investment Summary
Key Insights
Milestones
How it works
A compound interest calculator pays interest on your interest. Each period the rate applies to the whole balance — including interest already earned — so growth accelerates the longer it runs and the more often it compounds.
Compound interest
A = P · (1 + r/m)^(m · t)
- A
- final balance
- P
- principal
- r
- annual rate (decimal)
- m
- compounds per year
- t
- years
Worked example
- P = $10,000 at 7%, monthly
- 10 years
- A = 10,000 × (1 + 0.07/12)^(120)
≈ $20,097 — roughly doubles in 10 years (Rule of 72: 72 ÷ 7 ≈ 10.3).
Good to know
- Rule of 72: divide 72 by the rate to estimate the doubling time.
- More frequent compounding helps only slightly; time and rate matter far more.
- These are nominal figures — inflation lowers the real return.
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Frequently Asked Questions
What is compound interest?
Interest earned on both your principal and previously earned interest. Each period the rate applies to the whole balance, so growth accelerates over time — the effect that makes long-term investing so powerful.
How is compound interest calculated?
A = P(1 + r/m)^(m·t), where P is principal, r the annual rate, m compounds per year, and t years. $10,000 at 7% compounded monthly becomes about $20,097 after 10 years — roughly doubling.
What is the Rule of 72?
A quick estimate of doubling time: divide 72 by the annual return. At 7%, money doubles in about 72 ÷ 7 ≈ 10.3 years; at 9%, about 8 years. It is remarkably accurate for rates between roughly 4% and 12%.
How much does compounding frequency matter?
Less than people expect: $10,000 at 5% for 10 years grows to $16,289 with annual compounding and $16,486 with daily — about a 1% difference in the outcome. Rate and time dominate; frequency is a rounding refinement.
What is the difference between compound and simple interest?
Simple interest applies the rate only to the original principal, so growth is linear; compound interest snowballs. At 7% for 30 years, $10,000 earns $21,000 of simple interest but about $66,100 of compound interest.