Compound Interest Calculator
See how an initial amount grows over time with compound interest.
This tool provides mathematical projections for illustration purposes only and is not financial advice or a guarantee of investment returns.
| Years | Balance |
|---|---|
| 1 | $10,512 |
| 5 | $12,834 |
| 10 | $16,470 |
| 15 | $21,137 |
| 20 | $27,126 |
| 25 | $34,813 |
| 30 | $44,677 |
Frequently asked questions
What is compound interest?
Compound interest is interest calculated on both your original amount and any interest already earned, so your money grows faster over time compared to simple interest, which only applies to the original amount.
How does compounding frequency affect the result?
More frequent compounding (daily vs. annually, for example) results in slightly higher returns, since interest gets added to your balance more often and starts earning its own interest sooner.
Does this account for regular contributions?
No — this calculator shows growth from a single initial amount only. Adding regular monthly contributions would increase the final balance further, since each new contribution also earns compound interest for the time it's invested.
Is this a guarantee of investment returns?
No — this is a mathematical projection assuming a constant, fixed interest rate. Real investments typically fluctuate and involve risk; this tool is for illustration and planning purposes only.
How much will $10,000 grow to in 10 years at 5% interest?
With monthly compounding at 5% annual interest, $10,000 grows to about $16,470 after 10 years — see the chart above for other timeframes.
What is the rule of 72?
The rule of 72 is a quick way to estimate how long it takes money to double: divide 72 by the interest rate. At 5%, that's about 14.4 years — which roughly matches what this calculator shows for a 5% rate over that period.
Does compounding monthly make a big difference vs annually?
It helps, but not dramatically at everyday rates — $10,000 at 5% for 10 years grows to about $16,470 compounded monthly versus about $16,289 compounded annually, a difference of roughly 1%. The gap widens more at higher rates or over longer time periods.
How do I calculate compound interest by hand?
Divide the annual rate by the number of times interest is added each year, add 1, and raise the result to the power of the number of periods (years times compounds per year). Multiply by your starting amount. For example, $1,000 at 6% compounded annually for 3 years is $1,000 × 1.06 × 1.06 × 1.06 = $1,191.02.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original amount, while compound interest is calculated on the original amount plus the interest already added. On $10,000 at 5% for 10 years, simple interest gives $15,000 and monthly compounding gives $16,470.
How long will it take to double my money at 7%?
With annual compounding it takes about 10.2 years at 7%. The Rule of 72 gives a quick estimate of 72 ÷ 7, or about 10.3 years.
About this tool
This calculator shows how an initial amount grows over time with compound interest, using the standard compound interest formula A = P(1 + r/n)^(nt). Adjust the compounding frequency to see how it affects long-term growth.
Worked example
The calculator uses A = P(1 + r/n)^(nt), where P is the starting amount, r is the annual rate as a decimal, n is how many times a year interest is added and t is the number of years. For $10,000 at 5% for 10 years compounded monthly, r/n = 0.05 ÷ 12 and nt = 120, so the balance is $10,000 × (1.004167)^120 = $16,470.09, an interest gain of $6,470.09.
With simple interest, which is paid only on the original amount, the same 5% over 10 years would give $15,000. The extra $1,470.09 is interest earning interest.
Does compounding frequency matter?
| Compounding | Final balance | Interest earned |
|---|---|---|
| Annually | $16,288.95 | $6,288.95 |
| Quarterly | $16,436.19 | $6,436.19 |
| Monthly | $16,470.09 | $6,470.09 |
| Daily | $16,486.65 | $6,486.65 |
The effect of more frequent compounding is real but small. The interest rate and the length of time matter far more than whether interest is added monthly or daily.
How long does it take money to double?
A quick mental shortcut is the Rule of 72: divide 72 by the annual interest rate to estimate the years needed to double your money.
| Interest rate | Rule of 72 estimate | Exact |
|---|---|---|
| 3% | 24.0 years | 23.4 years |
| 5% | 14.4 years | 14.2 years |
| 7% | 10.3 years | 10.2 years |
| 10% | 7.2 years | 7.3 years |
The shortcut is close to the exact figure at everyday rates, and it is a handy way to see how a few percentage points change the picture.
Why time matters most
Compounding is slow at first and then accelerates, because each year's interest is calculated on a bigger balance. The same $5,000 at 7% grows like this:
| Years | Final balance | Interest earned | Growth multiple |
|---|---|---|---|
| 10 | $10,048 | $5,048 | 2.01x |
| 20 | $20,194 | $15,194 | 4.04x |
| 30 | $40,582 | $35,582 | 8.12x |
| 40 | $81,557 | $76,557 | 16.31x |
The last 10 years of the 40-year column add more than the first 20 years combined. That is why starting earlier is often worth more than starting with a larger amount later.
What this calculator leaves out
- Regular contributions. It models a single starting amount. To see the effect of saving every month, use the savings goal calculator.
- Inflation. A balance that grows 5% a year buys less if prices rise too, so the real gain is smaller than the figure shown.
- Taxes and fees. Tax on interest and account or fund fees reduce what you keep.
- Changing rates. Real savings and investment returns rise and fall. This tool assumes a constant rate, so treat the result as an illustration and not a forecast.