Compound Interest Calculator

What is compound interest?

Compound interest is interest earned on interest. Each period, the interest you've earned is added to your balance, and the next period's interest is calculated on that larger amount. In the early years the effect is small, but because growth builds on itself, the balance curve bends upward over time and the interest eventually outpaces your deposits.

The same math works against you on debt. A credit card balance that isn't paid off compounds too, which is why high-interest debt grows so quickly.

The compound interest formula

For a single deposit, A = P(1 + r/n)^nt, where P is the starting amount, r the annual rate as a decimal, n the number of times interest compounds per year, and t the number of years. $10,000 at 5% compounded monthly for 10 years is 10,000 × (1 + 0.05/12)¹²⁰ = $16,470.09.

Monthly deposits add a second part. Each deposit grows for the months remaining after it's made. This calculator steps through every month at the monthly rate equivalent to your compounding choice, (1 + r/n)^n/12 − 1, so the starting deposit grows exactly by the formula above and every later deposit earns the same effective rate.

How compounding frequency matters

More frequent compounding adds a little, with diminishing returns. $10,000 at 5% for 10 years, no deposits:

Banks advertise savings rates as APY (annual percentage yield) precisely because it bakes the compounding in, so two accounts can be compared directly. Loans quote APR, which doesn't.

The power of regular deposits

Time matters more than the amount. The same $200 a month at 7%, started at different ages and stopped at 65:

Starting ten years earlier adds only $24,000 of deposits but far more at the end, because the early money has decades longer to compound. For a fuller plan with raises, employer matching and inflation, use the retirement calculator.

The rule of 72

To estimate how long money takes to double, divide 72 by the annual rate. At 6%, 72 ÷ 6 = 12 years; at 9%, about 8 years. The rule is closest for rates between about 6% and 10%. The exact answer is ln(2) ÷ ln(1 + APY), which is what the calculator shows under the APY. It works in reverse too: to double in 10 years you need roughly a 7.2% return.

Simple vs. compound interest

Simple interest is paid only on the original amount: $10,000 at 5% simple interest earns $500 every year, $5,000 over ten years. Compounded annually, the same money earns $6,288.95 over ten years, because each year's interest earns interest too. Most car loans and personal loans charge simple interest on the remaining balance; savings accounts, CDs and investments compound.

What rate should I use?

For a savings account or CD, use the APY the bank quotes and choose its compounding schedule. Investments don't pay a fixed rate. Stock-market returns have averaged high single digits a year over long periods, with large swings from year to year, so many people plan with a conservative 5–7% for a stock-heavy portfolio. To think in today's dollars, use your expected return minus inflation. Comparing a past investment's return? The ROI calculator converts a total gain into an annualized rate you can plug in here.

Sources

The formulas on this page come from the published research below. Last updated October 11, 2026. This calculator gives estimates for general information. It isn't medical advice, so check anything important with a qualified professional.

1. U.S. Securities and Exchange Commission, Investor.gov. Compound Interest Calculator.Used for: Compound growth of a starting balance with regular monthly contributions