Compound Interest Calculator
See how your savings or investments grow with compound interest, regular monthly contributions and the compounding frequency of your choice.
| Year | Contributions | Interest | Balance |
|---|
How to use the compound interest calculator
- Enter your starting amount and how much you will add each month.
- Add the expected yearly interest rate or return and how many years you plan to save.
- Choose how often interest compounds — monthly is typical for savings accounts.
- See your future balance and a year-by-year growth table.
Formula: A = P(1 + r/n)nt, where P is the principal, r the annual rate, n the number of compounding periods per year and t the number of years. Monthly contributions are added at the end of each month and grow at the same rate.
Frequently asked questions
What is compound interest?
Interest that is earned on both your original money and the interest already added. Over long periods it makes balances grow much faster than simple interest.
How often should interest compound?
The more often it compounds, the more you earn — but the difference between monthly and daily is small. The effective annual rate shows the real yearly return.
What is the rule of 72?
Divide 72 by the annual rate to estimate how many years it takes to double your money. At 8%, money doubles in about 9 years.
What is a compound interest calculator?
A compound interest calculator shows how money grows when interest is added to the balance and then earns interest itself. You enter a starting amount, an optional monthly deposit, a yearly rate, a number of years and how often interest compounds, and it projects the future balance year by year.
It is useful for savings accounts, fixed deposits, recurring deposits and long-term investment goals. Keep in mind that the calculator assumes a steady rate every year. Real investment returns go up and down, and taxes, fees and inflation are not included, so treat every result as an educational estimate rather than a prediction.
The compound interest formula, step by step
For a single lump sum, the compound interest formula is A = P(1 + r/n)nt. Take $10,000 at 7% for 10 years, compounded monthly:
- P = 10,000, r = 0.07, n = 12, t = 10.
- Rate per period: 0.07 ÷ 12 = 0.0058333.
- Number of periods: 12 × 10 = 120.
- A = 10,000 × 1.0058333120 = $20,096.61.
- Interest earned: $20,096.61 − $10,000 = $10,096.61.
With simple interest (interest on the original $10,000 only) you would have $17,000. Compounding adds about $3,097 more over the same decade, and the gap widens every extra year.
Monthly vs yearly compounding
Here is the same $10,000 at 7% for 10 years with different compounding frequencies. The effective annual rate is the true yearly growth once compounding is included.
| Compounding | Balance after 10 years | Interest earned | Effective annual rate |
|---|---|---|---|
| Yearly | $19,671.51 | $9,671.51 | 7.000% |
| Quarterly | $20,015.97 | $10,015.97 | 7.186% |
| Monthly | $20,096.61 | $10,096.61 | 7.229% |
| Daily | $20,136.18 | $10,136.18 | 7.250% |
Moving from yearly to monthly compounding adds about $425 here, while moving from monthly to daily adds only about $40. The rate itself and the number of years matter far more than the frequency.
Monthly deposits and SIP-style investing
Regular deposits are where compounding really shows. In India this is how a SIP (systematic investment plan) or recurring deposit works. The table assumes ₹5,000 invested at the end of every month, with an assumed 12% yearly return compounded monthly. Mutual fund returns are not guaranteed; 12% is only an example.
| Period | Total invested | Estimated value | Estimated gain |
|---|---|---|---|
| 10 years | ₹6,00,000 | ₹11,50,193 | ₹5,50,193 |
| 15 years | ₹9,00,000 | ₹24,97,901 | ₹15,97,901 |
| 20 years | ₹12,00,000 | ₹49,46,277 | ₹37,46,277 |
Doubling the time from 10 to 20 years doubles what you put in but more than quadruples the value, because the later years compound on a much larger balance. Many SIP calculators assume the deposit is made at the start of each month, which gives slightly higher numbers (about ₹11,61,695 after 10 years in this example).
The rule of 72
The rule of 72 is a quick mental shortcut: divide 72 by the yearly rate to estimate the years needed to double your money. It is surprisingly close for everyday rates, assuming yearly compounding:
| Annual rate | Rule of 72 estimate | Exact doubling time |
|---|---|---|
| 4% | 18 years | 17.67 years |
| 6% | 12 years | 11.90 years |
| 8% | 9 years | 9.01 years |
| 10% | 7.2 years | 7.27 years |
| 12% | 6 years | 6.12 years |
Tips for using the calculator well
- Start early. Time is the biggest driver of compound growth, so a smaller amount invested sooner can beat a larger amount invested later.
- Use a realistic rate. Check the actual rate on your savings account or deposit, and use conservative assumptions for market investments.
- Think in real terms. Subtract expected inflation from the rate to see growth in today’s purchasing power.
- Remember taxes and fees. Interest on bank deposits is usually taxable, and fund expense ratios reduce returns each year.
- Compounding works against you on debt. Unpaid credit card balances grow the same way, often at much higher rates.
More questions
How do I calculate compound interest by hand?
Convert the yearly rate to a decimal, divide it by the number of compounding periods per year, add 1, raise the result to the total number of periods, and multiply by the principal. Subtract the principal to get the interest earned.
What is the difference between compound and simple interest?
Simple interest is paid only on the original amount, so it grows by the same sum each year. Compound interest is paid on the original amount plus earlier interest, so each year’s interest is larger than the last.
How much will $10,000 grow in 10 years?
At 7% compounded monthly, $10,000 grows to about $20,097 in 10 years with no further deposits. At 5% it would be about $16,470, and at 10% about $27,070. Enter your own rate above to check.
Is a fixed deposit compounded monthly or quarterly?
Many Indian banks compound fixed deposit interest quarterly, while US savings accounts often compound daily or monthly. Check your bank’s terms and choose the matching option in the calculator.
Related tools: see what borrowing costs with the loan calculator, plan a home purchase with the mortgage calculator, or work out percentage growth between two balances with the percentage calculator.
Further reading: Compound interest (Wikipedia).