Compound Interest Calculator
See how your money grows exponentially with the power of compounding
Results & Details
// Compounding Frequency Comparison
Year-by-Year Breakdown
| Year | Deposited | Interest | Total Interest | Balance |
|---|---|---|---|---|
| 📈 Calculate above to see yearly growth | ||||
How Compound Interest Works
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest — which only earns on the original amount — compound interest grows exponentially because your interest earns interest too.
Compound Interest Formula
Compounding Frequency
The more frequently interest compounds, the more you earn. Daily compounding produces slightly more than monthly, which produces more than annual. The difference is small at low rates but becomes more significant over longer periods and higher balances.
The Rule of 72
Divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 7% interest your money doubles approximately every 10.3 years. At 10% it doubles every 7.2 years.
Why Regular Contributions Matter
Adding regular monthly contributions dramatically accelerates growth. Even small monthly amounts — say €100 per month — can add tens of thousands to your final balance over 20–30 years due to the compounding effect on both the principal and the ongoing contributions.
Compound Interest: The Complete Guide
Built and verified by Andrius R. · Updated June 2026
Compound interest means earning interest on your interest. It sounds like a small detail. Over long periods it's the single most powerful force in personal finance — and the math below shows exactly how much it matters and when.
Simple vs compound: the same 7% behaves very differently
Simple interest (interest only on the original deposit): $10,000 + (10,000 × 0.07 × 30) = $31,000.
Compound interest (annual compounding): 10,000 × (1.07)30 = $76,123.
Same rate, same money, same 30 years — compounding adds an extra $45,000. The growth isn't a straight line; it's a curve that gets steeper the longer you leave it alone.
Does compounding frequency matter?
Some, but less than people expect. The same $10,000 at 7% for 30 years:
| Compounding | Final value | Effective annual rate |
|---|---|---|
| Annually | $76,123 | 7.00% |
| Monthly | $81,165 | 7.23% |
Monthly compounding adds about $5,000 over 30 years here — nice, but tiny compared to the effect of the rate itself or of starting earlier. When comparing savings accounts, look at the APY (which already includes compounding frequency) rather than the nominal rate.
The variable that dwarfs everything else: time
| Start age | Years to 65 | Total contributed | Value at 65 |
|---|---|---|---|
| 25 | 40 | $240,000 | ~$1,312,000 |
| 35 | 30 | $180,000 | ~$610,000 |
Starting ten years earlier means contributing $60,000 more — but ending with roughly $700,000 more. The first decade of contributions does the heaviest lifting because it compounds the longest.
The Rule of 72
To estimate how long money takes to double, divide 72 by the annual rate. At 7%, doubling takes about 72 ÷ 7 ≈ 10.3 years. At 3%, about 24 years. At 10%, about 7.2 years. It's an approximation, but it's accurate enough to sanity-check any projection — including the ones this calculator gives you.
Compounding works against you too
Credit card debt compounds exactly the same way, just in the wrong direction — and at 20%+ APR rather than 7%. A balance left unpaid at 22% doubles in roughly 3.3 years. The same force that builds retirement accounts hollows out unpaid balances, which is why paying off high-interest debt is mathematically equivalent to earning that rate, risk-free.
What rate should you assume?
For long-term projections, the figure you choose matters enormously, so anchor it to something real. Broad US stock-market index returns have historically averaged around 10% per year before inflation, roughly 7% after inflation, over very long periods — with brutal individual years in both directions. Savings accounts and bonds run far lower. A conservative habit: run the calculator twice, once at your hoped-for rate and once at 2 percentage points less, and make plans that survive the second number.
From the Blog
// Rule of 72
Divide 72 by your rate to find doubling time. 7% → doubles in ~10 years.
// Start Early
Starting 10 years earlier can double your final balance, even with the same total contributions.
// Reinvest Returns
Always reinvest dividends and interest — this is what triggers the exponential compounding effect.
// Real Rate
Subtract inflation from your rate for the real return. 7% nominal − 3% inflation ≈ 4% real growth.