Compound Interest Calculator
See how your savings and investments grow over time with the power of compound interest and regular contributions.
Results
Future Value
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Total Contributions
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Total Interest Earned
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Year-by-Year Breakdown
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Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which is calculated only on the principal, compound interest allows your money to grow at an accelerating rate over time. This is often referred to as "interest on interest."
How does compounding frequency affect my returns?
The more frequently interest is compounded, the more you earn. Monthly compounding produces slightly higher returns than quarterly, which in turn beats semi-annual or annual compounding. The difference is most noticeable at higher interest rates and over longer time periods. For example, $10,000 at 10% compounded monthly will grow more than the same amount compounded annually over 20 years.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it will take for your investment to double. Simply divide 72 by your annual interest rate. For example, at a 6% annual return, your money would roughly double in 72 / 6 = 12 years. This rule is an approximation and works best for interest rates between 6% and 10%.
How much should I contribute each month?
The amount you should contribute depends on your financial goals, income, and expenses. A common guideline is to save at least 15-20% of your gross income for retirement. Use this calculator to experiment with different monthly contribution amounts and see how they affect your future balance. Even small increases in monthly contributions can make a significant difference over decades.
Does this calculator account for taxes or inflation?
This calculator shows nominal growth and does not factor in taxes, inflation, or investment fees. Your actual purchasing power may be lower than the future value shown. To account for inflation, you can subtract the expected inflation rate (typically around 2-3%) from your annual interest rate before calculating. Consult a financial advisor for personalized tax and investment guidance.