Compound Interest Calculator
See how your money can grow over time with the power of compound interest.
The Power of Compound Interest
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. Over time, this leads to exponential growth of your investment.
How to Use This Calculator
- Initial Investment: Your starting amount (principal)
- Annual Interest Rate: Expected annual return rate
- Time Period: Number of years your money will grow
- Compounding Frequency: How often interest is calculated and added
Formulas Used
A = P (1 + r/n)^(nt)Where:
- A = Future value of investment
- P = Principal investment amount
- r = Annual interest rate (decimal)
- n = Number of compounding periods per year
- t = Time money is invested for (years)
The Rule of 72
To estimate how long it takes to double your money:
Years to double = 72 ÷ Interest RateExample: At 6% interest, your money doubles in about 12 years (72 ÷ 6 = 12).
Investment Strategies
- ✅ Start early - Time is your greatest ally in compounding
- ✅ Invest regularly - Consistent contributions amplify growth
- ✅ Reinvest dividends - Let your earnings generate more earnings
- ✅ Minimize fees - High fees can significantly reduce long-term gains
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