Compound Interest Calculator
See how a lump sum — plus optional monthly deposits — grows once interest starts earning interest on itself.
Understanding the Compound Interest Calculator
Compound interest is interest calculated on both your original balance and on the interest that balance has already earned. Each time interest is added, the base it’s calculated from grows a little — so the next round of interest is a little bigger too. Over short periods the effect looks small; over years and decades it becomes the single biggest driver of long-term growth.
The three levers that matter most are rate, time, and consistency. A higher rate helps, but time does more of the work than most people expect, because growth compounds on itself. Adding a modest, regular contribution on top of a lump sum accelerates the curve further, since every new deposit gets its own head start on compounding.
This calculator assumes a fixed rate applied consistently over the full period, which is a simplification — real accounts, index funds, and savings products fluctuate year to year. Use it to compare scenarios and understand the shape of growth, not as a guaranteed forecast.
See it in practice
Example 1 — Lump sum with monthly top-ups
Example 2 — Lump sum only, no contributions
Common questions
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is recalculated on the principal plus all interest already earned, so it grows on a curve that steepens over time.
It matters, but less than rate and time. Moving from annual to monthly compounding on the same nominal rate increases the effective yield slightly — see the APY calculator to compare that effect directly.
It’s a planning estimate. Real accounts rarely earn a perfectly steady rate — returns vary year to year — so treat the output as a reasonable long-run approximation, not a guarantee.
Model it both ways. Run the calculator once with contributions and once without to see how much of your projected growth depends on staying consistent versus the lump sum alone.
The standard formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the starting principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the number of years.
More frequent compounding, like daily instead of annually, produces a slightly higher return at the same nominal rate. The difference is usually modest compared to the effect of the rate itself or the length of time invested.
You can estimate this with the Rule of 72: divide 72 by the annual interest rate to get the approximate number of years to double. At 8%, for example, money doubles in roughly 9 years.
Yes, the same math applies, but it works against you: unpaid interest gets added to the balance, and future interest is then calculated on that larger amount. This is part of why unpaid credit card debt can grow quickly.
Yes, for savings and investments, compound interest is always better than simple interest at the same rate, since your returns start earning their own returns. The gap between the two grows larger the longer the money stays invested.