Free Financial Tools · MoneyConverter.ai
Compound Interest
Calculator
See exactly how your money grows over time. Adjust principal, rate, and time to watch your wealth build.
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Instant Results
$
$
7%
20 years
Your Growth Projection
Final Balance
$0
after 20 years
Interest Earned
$0
Total Contributed
$0
Return on Investment
0%
Monthly Earnings
$0
Growth Over Time
Principal
Interest
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How Compound Interest Works
Compound interest means you earn interest on your interest — making your money grow exponentially over time.
A = P(1 + r/n)nt + PMT × [((1 + r/n)nt – 1) / (r/n)]
AFinal amount (what you end up with)
PPrincipal (your initial investment)
rAnnual interest rate (as a decimal)
nCompounding frequency per year
tTime in years
PMTRegular monthly contribution
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Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both your initial principal and the accumulated interest from previous periods. Unlike simple interest, compound interest causes your money to grow exponentially — you earn "interest on interest," which accelerates growth over time.
How often should interest compound for maximum growth?
The more frequently interest compounds, the faster your money grows. Daily compounding yields slightly more than monthly, which yields more than annually. However, the difference between daily and monthly compounding is usually small — the interest rate and time period matter much more.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Simply divide 72 by your annual interest rate. For example, at 7% annual interest, your money doubles in approximately 72 ÷ 7 = 10.3 years.
Does this calculator account for inflation?
This calculator shows nominal growth (before inflation). To estimate real purchasing power, subtract the inflation rate from your interest rate. For example, if your investment earns 7% and inflation is 3%, your real return is approximately 4%.
How do monthly contributions affect compound growth?
Regular monthly contributions dramatically accelerate growth due to compounding. Even small monthly additions — like $100 or $200 — can add tens of thousands of dollars to your final balance over a 20–30 year period. Consistency is one of the most powerful factors in building wealth.