Compound Interest Calculator
Free compound interest calculator — see what a starting balance grows to over time at a given rate, with annual, quarterly, monthly or daily compounding. Runs in your browser, no sign-up.
Compound interest is the engine behind long-term investing. Each period, the balance earns some interest; that interest gets added to the balance; and the new, larger balance earns interest next period. The longer you let it run, the more the curve bends upward.
The formula
A = P × (1 + r/n)^(n·t)
where P is the starting balance, r is the annual interest rate as a decimal (7% = 0.07), n is the number of times interest compounds per year (12 = monthly, 365 = daily) and t is the time in years.
Plugging in $10,000 at 7% compounded monthly for 30 years:
10,000 × (1 + 0.07 ÷ 12)^(12 × 30) = 10,000 × 1.00583²⁶⁰ ≈ $81,165
Of that, only $10,000 is your original deposit — every other dollar is interest, and most of it is interest earned on previously-earned interest.
Compounding frequency
The more often interest compounds, the larger the final balance, but it
saturates quickly. Annual → monthly is a meaningful jump. Monthly → daily is
nearly nothing — the curve approaches a ceiling called continuous
compounding (A = P·e^(rt)), and for any realistic rate you basically hit
that ceiling at monthly.
Time matters more than rate
Two levers control the final number: the rate and the time. Over short horizons the rate dominates; over long horizons time dominates, because the exponent is what grows. Doubling the years more than doubles the result; doubling the rate doesn’t, because compounding is multiplicative in the rate but exponential in time. This is why “start early” beats “earn more later” for most people.
What it doesn’t include
This calculator assumes a one-off deposit with no withdrawals, no additional contributions, no taxes and no inflation adjustment. Real investing involves all four. For a quick reality check: subtract 2–3% from the rate to get an inflation-adjusted (“real”) return.
Worked examples
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$10,000 invested at 7% for 30 years, compounded monthly
Final balance: $81,164.97 — $71,164.97 of interest over 30 years.
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$5,000 at 5% for 20 years, compounded monthly
Final balance: $13,563.20 — $8,563.20 of interest over 20 years.
Frequently asked questions
What is compound interest?
Interest that earns interest. Every compounding period the bank credits some interest to your balance, and from then on the *new* balance is what earns interest next period. Over long time horizons that snowballs hard: most of the final balance is interest-on-interest, not the original principal.
How does compounding frequency affect the result?
The more often interest compounds, the slightly higher the final balance — same annual rate, faster snowball. But the difference between monthly and daily is small (and the difference between annual and monthly is the meaningful one). The bigger lever is the *rate* and the *time*.
What is the formula?
A = P × (1 + r/n)^(n·t), where P is the starting balance, r is the annual rate as a decimal, n is the compounding periods per year and t is the years. With n = 12 (monthly) and r = 0.07 over t = 30 years, $10,000 becomes 10000 × (1 + 0.07/12)^360 ≈ $81,165.
Does this account for taxes or inflation?
No — this is a pure pre-tax, nominal-dollar projection. Real-life investment returns are reduced by taxes (unless it's a Roth/tax-advantaged account) and by inflation eating away at purchasing power. As a rough rule, subtract about 2–3% from the rate to get an inflation-adjusted ("real") return.
Can I include regular monthly contributions?
Not in this version — this calculator handles a single lump sum left to compound. For periodic contributions you want the future-value-of-annuity formula instead; we'll add a dedicated retirement / savings-goal calculator for that.