Compound Interest
Investment growth calculator
Final Balance
Total Interest
Total Return
Year-by-year breakdown
| Year | Balance | Interest Earned |
|---|
How it works
Enter your starting amount (principal), annual interest rate, time period in years, and how often interest compounds. The calculator shows your final balance, total interest earned, and return percentage. The year-by-year table breaks down how your money grows each year.
Compound vs simple interest
Simple interest earns a fixed amount each period based only on the original principal. Compound interest earns interest on both the principal and all previously accumulated interest, so the balance grows faster over time. The longer the period, the wider the gap between the two.
simple: A = P × (1 + r × t)
compound: A = P × (1 + r/n)^(n×t)
Compound frequency
More frequent compounding means interest is added to the balance sooner, so the next period's interest is calculated on a slightly larger number. The practical difference between monthly and daily is small, but the jump from annual to monthly is significant over long periods.
- Annually: n = 1
- Semi-annually: n = 2
- Quarterly: n = 4
- Monthly: n = 12
- Daily: n = 365
The rule of 72
A quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6% it takes roughly 72 / 6 = 12 years; at 9% roughly 8 years. It works because of the logarithmic nature of exponential growth and is accurate to within a year for rates between 2% and 20%.
years to double ≈ 72 / rate (%)