What it does and when to use it
The calculator estimates how principal, deposits, and interest can grow over time.
Use it to plan savings, investments, or compare long-term scenarios.
Compound Interest — The Complete Guide
At a glance
What to enter
Enter starting balance, annual rate, duration, compounding frequency, and any regular deposit.
How to read the result
The future value is an estimate; separate contributions from growth generated by interest.
Compound interest is interest calculated on both the principal and accumulated interest. The longer the time period, the more dramatic the exponential growth.
The Formula
A = P × (1 + r/n)^(n×t)
A = Final amount
P = Principal
r = Annual interest rate (as decimal)
n = Compounding periods per year
t = Years
Numerical Example
$10,000 at 7% annual interest, monthly compounding, for 30 years:
A = 10,000 × (1 + 0.07/12)^(12×30) = $76,123
The principal grew 7.6× without any additional contributions!
The Rule of 72
To find how many years to double your money: divide 72 by the annual rate.
Years to double = 72 ÷ Interest Rate %
Example: 72 ÷ 6% = 12 years
Common mistakes
- Using 7 instead of 0.07 in a manual formula.
- Ignoring fees, taxes, and inflation.
Frequently asked questions
Is the return guaranteed?
No. The entered rate is a planning assumption.
Why does compounding frequency matter?
More frequent compounding adds interest to principal sooner.
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