Compound Interest Calculator
Calculate future value with compounding interest and optional monthly contributions.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your original principal and the interest already accumulated. Unlike simple interest (earned only on the principal), compound interest grows exponentially — each period's interest becomes part of the base for the next period's calculation.
What is the compound interest formula?
FV = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate as a decimal, n is the number of compounding periods per year (12 for monthly, 365 for daily), and t is the time in years. The result is the future value including all compounded interest.
What is the Rule of 72?
The Rule of 72 is a shortcut: divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 6%, money doubles in roughly 72 ÷ 6 = 12 years. At 9%, it doubles in 8 years. This works because of how compound growth curves behave.
Does compounding frequency matter?
Yes, but the difference diminishes at higher frequencies. Moving from annual to monthly compounding on $10,000 at 7% over 10 years increases your return by about $300. Moving from monthly to daily adds only ~$10 more. The biggest jump is from simple to any compounding.
How do regular contributions affect compound growth?
Regular contributions dramatically accelerate growth. Adding $200/month to a $10,000 principal at 7% for 20 years yields ~$208,000 — compared to ~$38,700 with no contributions. This is why consistent investing early, even in small amounts, produces outsized long-term results.