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Compound Interest Calculator

Free compound interest calculator: see how your savings grow over time. Enter principal, rate, years, and compounding frequency for instant results.

About this tool

Compound interest is often called the eighth wonder of the world: your money earns interest, and then that interest earns interest too. Over years and decades, this snowball effect turns modest savings into serious wealth.

Enter your starting amount, annual rate, number of years, and how often interest compounds, and watch the growth - the difference between simple and compound interest will surprise you.

How to use

Type your initial principal, the expected annual interest rate, and how many years the money will grow. Choose the compounding frequency - monthly is typical for savings accounts.

Press Calculate Growth to see the final balance and how much of it is interest earned. Increase the years to see why starting early matters more than starting big.

The math behind it

The formula is A = P(1 + r/n)^(n x t), where P is the principal, r the annual rate, n the number of times interest compounds per year, and t the years.

For example, $10,000 at 7% compounded monthly for 20 years grows to about $40,387 - more than $30,000 of it pure interest.

Frequently asked questions

What is the difference between simple and compound interest?
Simple interest is paid only on the original principal. Compound interest is paid on the principal plus all previously earned interest, so growth accelerates over time. On long timelines, compounding can easily double or triple the final amount versus simple interest.
How often should interest compound?
More frequent compounding grows money slightly faster: daily beats monthly, monthly beats annually. The difference is modest at low rates but meaningful over decades. Most savings accounts compound daily or monthly.
What is a realistic interest rate to assume?
High-yield savings accounts typically pay 4-5% in recent years, while long-term stock market returns average around 7-10% before inflation. Be conservative in planning - assuming 6-7% for investments keeps expectations realistic.

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