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Simple Calculators

Compound Interest Calculator

Calculate how your investments grow over time with compound interest. See the power of regular contributions and different compounding frequencies.

$
$/mo
%
years
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Monthly contribution and tax rate are optional. Tax applies to the growth only, in the after-tax view.

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Quick summary

Compound interest is interest earned on both your original deposit and the interest already added, so growth speeds up over time. Enter an initial investment, monthly contribution, rate, compounding frequency, and number of years to see your final amount, total contributions, and interest earned. Example: $10,000 plus $500 a month at 7% compounded monthly grows to about $106,639 in 10 years. Results assume a constant rate and are estimates.

Reviewed by Simple Calculators TeamLast reviewed

For planning only — not financial or tax advice. Results are estimates based on your inputs and the stated assumptions. Confirm important decisions with a qualified professional.

How to use this calculator

  1. Enter your Initial Investment (the principal), the amount you start with.
  2. Enter a Monthly Contribution if you plan to add money regularly, or leave it at 0.
  3. Enter the annual Interest Rate you expect to earn.
  4. Choose how often interest compounds: Annually, Quarterly, Monthly, or Daily.
  5. Enter the Investment Time in years and, optionally, a Tax Rate on interest, then click Calculate Compound Interest.
  6. Read the Final Amount, Total Contributions, and Interest Earned beside the form, toggle the after-tax view if you entered a tax rate, and use the growth chart and year-by-year table below to see each year's balance.

Mathematical Formulas & Examples

Compound Interest with Regular Contributions

A=P(1+rn)nt+PMT×(1+rn)nt−1rnA = P\left(1 + \frac{r}{n}\right)^{nt} + PMT \times \frac{\left(1 + \frac{r}{n}\right)^{nt} - 1}{\frac{r}{n}}
A
Final amount after t years
P
Initial investment (principal)
r
Annual interest rate as a decimal
n
Compounding periods per year (1, 4, 12, or 365)
t
Investment time in years
PMT
Contribution per compounding period (monthly contribution × 12 ÷ n), added at the end of each period

Worked example

$10,000 initial investment plus $500 per month at 7% annual interest, compounded monthly, for 10 years

Given
P = $10,000
PMT = $500
r = 0.07
n = 12
t = 10
Calculation
A=10,000(1+0.0712)120+500×(1+0.0712)120−10.0712A = 10{,}000\left(1 + \frac{0.07}{12}\right)^{120} + 500 \times \frac{\left(1 + \frac{0.07}{12}\right)^{120} - 1}{\frac{0.07}{12}}
Result
A ≈ $106,639.02 ($70,000 contributed + $36,639.02 interest)

Years to Double

Years to Double=ln⁡2ln⁡(1+r)\text{Years to Double} = \frac{\ln 2}{\ln(1 + r)}
r
Annual interest rate as a decimal

Worked example

How long it takes money to double at 8% per year (the Rule of 72 estimates 72 ÷ 8 = 9 years)

Given
r = 0.08
Calculation
Years to Double=ln⁡2ln⁡1.08=0.69310.0770\text{Years to Double} = \frac{\ln 2}{\ln 1.08} = \frac{0.6931}{0.0770}
Result
≈ 9.01 years

Frequently asked questions

What is compound interest and how does it work?

Compound interest is interest calculated on both your original principal and the interest you have already earned. Each period, earned interest is added to the balance, so the next period's interest is calculated on a larger amount. Unlike simple interest, which grows in a straight line, compound interest grows exponentially, and the effect becomes much larger the longer the money stays invested.

How is compound interest calculated?

Compound interest is calculated with A = P(1 + r/n)^(nt), plus PMT × ((1 + r/n)^(nt) − 1) ÷ (r/n) when you add regular contributions. P is the starting amount, r the annual rate, n the compounding periods per year, t the years, and PMT the deposit per period. This calculator converts your monthly contribution to a per-period amount and treats each deposit as made at the end of the period.

How often should interest compound for maximum growth?

More frequent compounding produces slightly more growth, so daily beats monthly, which beats quarterly and annually at the same stated rate. The difference is usually small compared with the effect of the rate itself, your contributions, and time. It grows larger at higher interest rates and over longer periods, so compare accounts by their effective yield rather than by compounding frequency alone.

What's the difference between compound interest and simple interest?

Simple interest is calculated only on the original principal, while compound interest is also calculated on interest already earned. With simple interest, $10,000 at 8% earns $800 every year. With annual compounding, the second year earns 8% of $10,800, and so on, so after 10 years the calculator shows about $21,589 instead of the $18,000 simple interest would produce.

How do regular contributions affect compound interest?

Regular contributions usually make the biggest difference to your final balance because each deposit starts compounding as soon as it is added. In the example on this page, $500 a month adds $60,000 of deposits over 10 years, and those deposits plus the initial $10,000 earn about $36,639 in interest. Starting contributions earlier gives each dollar more years to compound.

What is the Rule of 72?

The Rule of 72 is a shortcut for estimating how long money takes to double: divide 72 by the annual interest rate. At 8%, it gives 9 years. This calculator's Years to Double figure uses the exact formula ln 2 ÷ ln(1 + r) instead, which gives about 9.01 years at 8%. The shortcut is closest for rates between roughly 6% and 10%.

How do taxes affect compound interest calculations?

Taxes reduce what you keep from your interest earnings. If you enter a Tax Rate, this calculator applies it once to the total interest earned at the end and shows an after-tax value. It does not model taxes paid each year, which would reduce compounding slightly more, or tax-advantaged accounts such as IRAs and 401(k)s where growth is tax-deferred or tax-free.

What are common mistakes when using a compound interest calculator?

The most common mistake is assuming a high, steady return every year, when real investment returns vary and can be negative. Others are forgetting inflation, which lowers what the future balance can buy, and ignoring fees, which compound against you just as returns compound for you. Try a conservative rate as well as an optimistic one to see a realistic range.

Key terms

Principal
The initial amount of money invested or loaned, before any interest is added.
Compound Frequency
How often interest is calculated and added to the principal (annually, quarterly, monthly, or daily).
Annual Interest Rate
The percentage rate of interest paid or earned per year, expressed as a decimal.
Effective Annual Rate (EAR)
The actual annual rate when compounding is taken into account, showing the true annual return.
Future Value
The value of an investment at a specific point in the future, including principal and accumulated interest.
Present Value
The current value of a future sum of money, discounted at a specific interest rate.
Annuity
A series of equal payments made at regular intervals, such as monthly contributions to an investment.
Time Value of Money
The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

Methodology, sources & limitations

This page shows the formula, assumptions, and limitations used for this estimate. Rates, thresholds, and other time-sensitive inputs can change, so verify them against the relevant official source before relying on a result.

For our review approach and the primary sources we consult, see the methodology and source policy. If you spot an outdated figure or formula, please contact us with a correction.