Compound Interest Calculator
Calculate the future value of an investment with compound interest and see a year-by-year growth schedule.
Enter details to calculate compound interest.
What This Calculator Does
Interest that compounds means you're earning interest on your interest, not just your original deposit, and the gap between compound and simple growth widens dramatically the longer money sits. This tool projects that growth for a single lump-sum principal — no ongoing contributions — across a term you choose, at monthly, quarterly, semi-annually, or annually compounding. The output includes both the final future value and a year-by-year table showing exactly how much interest accrued each year and how the balance built up.
How to Use It
Enter your starting principal, the annual interest rate as a percentage, and the number of years you plan to leave it invested, then pick a compounding frequency from the dropdown. Hit Calculate and the Calculation Summary shows your future value and total interest earned side by side with your original principal, while the Growth Schedule table underneath breaks the same numbers down year by year — useful for spotting how much of the eventual total comes from later years, once the balance is large enough for the compounding effect to really accelerate.
The Formula
This is the standard compound interest formula, A = P(1 + r/n)ⁿᵗ, where P is your principal, r is the annual rate as a decimal, n is the number of compounding periods per year (1 for annually, 2 for semi-annually, 4 for quarterly, 12 for monthly), and t is the number of years. Under the hood, the calculator doesn't just plug in the final numbers — it steps through the balance one compounding period at a time at full decimal precision, and only rounds to the nearest cent when it displays each year's row in the schedule. That means the running total never accumulates the small rounding errors that repeated per-period rounding would otherwise introduce, and the totalInterestEarned figure you see is exactly the future value minus your original principal.
A Worked Example
$1,000 invested at 5% annual interest for 10 years, compounded monthly, grows to $1,647.01 — $647.01 of that is interest, more than 64% on top of the original deposit, purely from the effect of compounding twelve times a year instead of once. Switch the scenario to annual compounding with a larger sum over a shorter window — $5,000 at 8% for 5 years — and the calculator returns $7,346.64, meaning $2,346.64 in interest. Notice the second example compounds far less frequently (once a year instead of twelve times) but still earns a larger interest total, simply because the rate and starting principal are both higher — a reminder that rate and principal typically matter more to your outcome than compounding frequency alone.
How Compounding Frequency Actually Affects Returns
To isolate frequency as the only variable, take the same $1,000 principal at the same 5% annual rate for the same 10 years and change nothing but how often it compounds. Compounded annually, it grows to $1,628.89 ($628.89 in interest). Compounded monthly — the same scenario used in the worked example above — it grows to $1,647.01 ($647.01 in interest). That's a real but modest $18.12 gap: going from 1 compounding period a year to 12 is worth about 1.1% more total growth over a decade. Frequency does matter, and the gap widens (slowly) with higher rates and longer horizons, but it's a minor effect next to your rate, your principal, and how long the money stays invested — which is why chasing a slightly-more-frequent compounding schedule is rarely worth as much as finding a meaningfully higher rate or simply starting sooner.
The Rule of 72: A Quick Mental-Math Shortcut
If you just want a rough sense of how long money takes to double at a given rate, without running the full formula, divide 72 by the annual rate (as a whole number, not a decimal). At 5%, that's 72 ÷ 5 ≈ 14.4 years — close to the true annually-compounded answer of about 14.2 years. At 8%, it's 72 ÷ 8 = 9 years. The Rule of 72 is an approximation, not exact, and it works best in the roughly 6–10% range — it gets noticeably less accurate at very low or very high rates — but it's a genuinely useful way to sanity-check a growth projection or compare two rates in your head before reaching for a calculator.
Limitations
This calculator projects growth at a single, fixed rate for the entire term — real investment and savings returns fluctuate year to year and are never actually constant, so treat any projection here as an illustration of compounding mechanics, not a guarantee of what a real account will do. It also reports nominal returns: the dollar figures grow, but inflation reduces what those future dollars can actually buy, so real (inflation-adjusted) growth is meaningfully lower than the nominal future value shown. A common way to approximate that is to subtract an assumed inflation rate from your rate before entering it here, to see a rough real-terms projection instead of a nominal one.
FAQ
- What compounding frequencies are supported?
- Monthly, quarterly, semi-annually, and annually — select what matches your account.
- Does this account for inflation?
- This calculator shows nominal returns. For real returns, you can manually adjust the rate to account for estimated inflation.