Added at the end of each compounding period.
Compound interest earns interest on your interest. Over long periods it is the most powerful force in personal finance — this calculator shows exactly how much your money could grow.
How to use the Compound Interest Calculator
- 1 Enter your starting balance and the expected annual interest rate.
- 2 Set the number of years and how often interest compounds.
- 3 Optionally add a regular contribution made each compounding period.
Formula
A = P(1 + r/n)^(nt) + C × [((1 + r/n)^(nt) − 1) ÷ (r/n)] P = principal, r = annual rate, n = compounds per year, t = years, C = contribution per compounding period
Worked examples
Input: $10,000 at 7% for 10 years, monthly
Result: $20,096.61
Interest earned ≈ $10,097
Input: $0 start, $200/month at 6% for 30 years
Result: $200,903.01
Contributions $72,000
The rule of 72
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6% that is about 12 years; at 9% about 8 years.
How compounding frequency matters
More frequent compounding means slightly faster growth, because interest starts earning interest sooner. The effective annual rate (EAR) expresses this: 7% compounded monthly is equivalent to 7.23% compounded once a year. The effect of frequency is small compared with the effect of time and rate — starting early matters most.
These projections assume a constant rate of return. Real investments fluctuate; past returns do not guarantee future results.
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years.
What does compounding monthly mean?
Interest is calculated and added to the balance 12 times a year, each time on the slightly larger balance.
How are contributions handled?
Contributions are added at the end of each compounding period, so choose monthly compounding for monthly deposits.
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