Compound Interest Calculator
See how an initial investment grows over time with compound interest. Compare monthly, quarterly, and annual compounding.
Quick Answer
This compound interest calculator shows how your savings grow exponentially over time using the formula A = P(1+r/n)^(nt). See the power of compounding with different starting amounts, monthly contributions, rates, and time horizons.
How to Use This Calculator
Enter the amount you plan to invest as an initial principal. Set the expected annual interest rate — historical stock market returns average 7-10% before inflation. Choose how often interest compounds: daily, monthly, quarterly, or annually. Select your investment time horizon in years. This compound interest calculator instantly shows your final amount, total interest earned, and a year-by-year breakdown of investment growth, demonstrating the full power of compounding.
How Compound Interest and the Power of Compounding Work
Compound interest is interest earned on previously earned interest — this is the power of compounding. Unlike simple interest which only returns on your original principal, compounding adds each period's interest to your balance so the next period earns on a larger base. Use this investment calculator to see how starting early and staying invested creates exponential growth. The more frequently interest compounds and the longer your horizon, the more powerful the compound interest effect. The Rule of 72 estimates doubling time: divide 72 by your annual rate.
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