Compound Interest Calculator
Discover the power of compound interest. Enter your initial investment, interest rate, and time period to see exactly how your money grows when earnings generate their own earnings.
Future Value
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Total Interest Earned
This calculator provides estimates and is for informational purposes only.
The Power of Compound Interest
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Albert Einstein reportedly called it the "eighth wonder of the world." The formula is: A = P(1 + r/n)^(nt).
The key factors are: how much you invest, the interest rate, how often interest compounds, and how long you leave it invested. Time is the most powerful factor — starting early can make a dramatic difference.
Frequently Asked Questions
What is compounding frequency?
Compounding frequency is how often interest is calculated and added to your balance. More frequent compounding (e.g., daily vs. annually) results in slightly faster growth because interest earns interest sooner.
How does compound interest differ from simple interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all accumulated interest. Over long periods, this difference becomes enormous.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by the annual interest rate. For example, at 8% interest, your money doubles in approximately 9 years (72 ÷ 8 = 9).