How to use the Compound Interest Calculator
- Enter your starting amount and the expected annual interest rate.
- Choose how often interest is compounded.
- Add an optional monthly contribution and the number of years.
- Review the final balance and the year-by-year table.
Compound interest formula
A = P ร (1 + r/n)nยทt
- A โ final amount
- P โ starting principal
- r โ annual rate as a decimal
- n โ compounding periods per year
- t โ years
Monthly contributions are added at the end of each month and earn interest from then on.
The rule of 72
A quick way to estimate how long money takes to double: divide 72 by the annual interest rate. At 8% your money doubles in roughly 72 รท 8 = 9 years.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is earned only on the original principal. Compound interest is also earned on previously earned interest, so growth accelerates over time.
Does more frequent compounding make a big difference?
It helps, but the effect is small compared with the interest rate and the time invested. Starting early matters far more.