Compound Interest Calculator
See how your investments and savings grow over time with the power of compound interest.
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Growth Over Time
Year-by-Year Breakdown
▾| Year | Principal | Interest Earned | Balance |
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What Is Compound Interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This "interest on interest" effect causes your money to grow exponentially over time, rather than linearly as with simple interest.
The formula is A = P(1 + r/n)nt, where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times interest compounds per year, and t is the time in years. When you add regular contributions, the future value of an annuity formula is added.
Compound Interest vs Simple Interest
Simple interest is calculated only on the original principal: Interest = P × r × t. Compound interest is calculated on the principal plus all previously earned interest. The longer the time period, the more dramatic the difference.
For example, $10,000 at 7% for 30 years earns $21,000 with simple interest (total: $31,000) but grows to $81,136 with monthly compounding — nearly 4× as much. This is why starting to save early is so powerful.
The Power of Compounding — Real Examples
| Principal | Rate | Years | Compounded | Final Balance |
|---|---|---|---|---|
| $10,000 | 7% | 10 yr | Monthly | $20,097 |
| $10,000 | 7% | 20 yr | Monthly | $40,388 |
| $10,000 | 7% | 30 yr | Monthly | $81,136 |
| $1,000/mo | 7% | 30 yr | Monthly | $1,219,971 |