Compound Interest Calculator
See how your money grows with compound interest. Set principal, rate, compounding frequency and years — get the final balance, total interest and a year-by-year growth chart. Free, instant.
How to use this tool
- Enter starting amount, annual interest rate, compounding frequency and years in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your final balance and the full breakdown beneath it.
Compound interest earns interest on your interest, so balances grow faster the longer you stay invested. This calculator compounds your starting amount at the rate and frequency you choose and charts the year-by-year balance.
Formula: A = P(1 + r/n)nt, where P is the principal, r the annual rate, n the compounding periods per year and t the years.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Final balance = P × (1 + r/n)n×t
Where P = starting principal, r = annual interest rate (as a decimal), n = compounding frequency per year, t = time in years.
Total interest earned = Final balance − P.
When rate = 0, Final balance = P.
How it works
This calculator applies the standard compound interest formula, raising the periodic growth factor (1 + r/n) to the total number of compounding periods (n × t), then multiplying by the principal to find the final balance. The year-by-year series is computed by evaluating the same formula at each integer year from 0 to t.
Results assume a fixed annual rate compounded at the selected frequency with no additional contributions or withdrawals. Real-world returns on investments vary and are not guaranteed; inflation and taxes are not deducted.
Worked example
- Inputs: $1,000 principal, 5% annual rate, compounded annually (n = 1), 10 years.
- Periodic rate: r/n = 0.05 ÷ 1 = 0.05.
- Total periods: n × t = 1 × 10 = 10.
- Apply formula: 1,000 × (1.05)^10 = 1,000 × 1.628895 = $1,628.89 (rounded).
- Total interest earned = $1,628.89 − $1,000 = $628.89.
Final balance = $1,628.89 | Total interest earned = $628.89
Common mistakes to avoid
- Entering the rate as a whole percent (e.g., 5) when the formula expects a decimal (0.05) — some implementations handle this automatically, but confirming the input format is critical.
- Assuming annual compounding when the account uses daily or monthly compounding — more frequent compounding yields a slightly higher balance than annual.
- Ignoring inflation: the nominal balance grows, but real purchasing power is lower — a result showing $200k in 30 years at 5% does not mean $200k of today's spending power.
Key terms
- Compound interest
- Interest calculated on both the initial principal and the accumulated interest from previous periods, causing exponential growth over time.
- Compounding frequency
- How often interest is calculated and added to the principal per year; common values are annually (1), quarterly (4), monthly (12), or daily (365).
- Principal
- The initial amount of money deposited or invested before any interest is added.
- Rule of 72
- A quick approximation: dividing 72 by the annual interest rate gives the approximate number of years for an investment to double at compound interest.
- Time value of money
- The financial principle that a given sum of money is worth more today than the same amount in the future, because money available now can earn interest.
Frequently asked questions
- What does compounding frequency change?
- More frequent compounding (e.g. daily vs annually) earns slightly more, because interest is added — and starts earning — sooner.
- Does this include monthly contributions?
- No — this is for a single lump sum. Use the Investment Growth Calculator to add regular monthly contributions.