Compound Interest Calculator
See how your investment grows with the power of compounding.
$
%
yrs
Investment Growth
Final Amount
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after compound interest
Principal
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Interest Earned
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Rule of 72: At —% rate, your money doubles in approximately — years.
Year-by-Year Breakdown
| Year | Balance | Interest This Year |
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Frequently Asked Questions
- What is compound interest?
- Compound interest is interest earned on both the initial principal and the interest already accumulated. This "interest on interest" effect causes wealth to grow exponentially over time.
- How often should interest compound for maximum growth?
- More frequent compounding means slightly higher returns. Daily compounding yields more than monthly, which yields more than quarterly or annually. The difference between daily and monthly is small, but it adds up over decades.
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the original principal. Compound interest is calculated on principal plus accumulated interest. Over 20+ years the gap between the two becomes very significant.
- What is the Rule of 72?
- Divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 6% it takes ~12 years; at 9% it takes ~8 years. It's a quick way to gauge the power of compounding.