Compound Interest Calculator

"Compound interest is the eighth wonder of the world." - Albert Einstein. Calculate your investment growth now.

$
%
Years

Future Value

Principal
Total Interest
Principal
Interest

How it Works

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

The Formula

A = P (1 + r/n)nt

  • A = Future Value
  • P = Principal (Initial amount)
  • r = Annual Interest Rate (decimal)
  • n = Number of times interest applied per time period
  • t = Number of time periods elapsed (years)

Unlike simple interest, which is calculated only on the principal amount, compound interest allows your money to grow exponentially over time.

Scenarios

Long-term Savings

Banks usually pay compound interest on savings accounts. See how your savings will grow over 10 or 20 years.

Stock Market Investing

With an assumed return rate (e.g., 8%), calculate the potential wealth accumulation from holding stocks long-term.

Loan vs Investment

Understand the cost of debt. High-interest debts (like credit cards) compound against you, just as investments compound for you.

Inflation Impact

Use a negative rate or subtract inflation from your return rate to see the "real" value of your money in the future.

FAQ

What is the difference between Simple and Compound Interest? ▼
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus the accumulated interest. Compound interest yields higher returns over time.
Which compounding frequency should I choose? ▼
It depends on your financial product. Savings accounts might compound monthly or yearly. If you are unsure, "Yearly" is a standard conservative estimate.
What is the Rule of 72? ▼
The Rule of 72 is a quick way to estimate the number of years required to double the invested money at a given annual rate of return. Divid 72 by the annual rate of return to get the years.
Why is the growth slow at first? ▼
Compound interest is exponential. In the early years, the interest base is small. As the interest base grows over time (usually 10+ years), the returns start to accelerate rapidly.
Does this consider inflation? ▼
No, this calculator shows the nominal future value. To account for inflation, you can subtract the inflation rate from your annual interest rate input.
What is APY? ▼
APY (Annual Percentage Yield) considers the effect of compounding frequency. If interest compounds more frequently than once a year, the APY will be higher than the nominal rate.
Can I calculate negative interest? ▼
Yes. You can enter a negative rate to simulate depreciation or loss of value over time.
Is this calculator accurate? ▼
The math is precise. However, real-world financial products may have specific rules (like day-count conventions) that differ slightly. Use this for estimation.

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