Tools Compound Interest Calculator
How much will your money grow with compound interest?
Compound interest pays interest on your interest, so growth speeds up the longer you wait. See what a starting amount and monthly deposits grow to, how much of the ending balance is interest, how long your money takes to double, and what it would be worth in today’s dollars.
Your result
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How this calculator works
Balance = start × (1 + i)m + monthly × ((1 + i)m − 1) ÷ i
Here m is the number of months and i is the monthly growth rate. Compounded monthly, i is simply the yearly rate ÷ 12. Compounded annually or daily, it’s the monthly rate that gives the same yearly growth, (1 + rate ÷ n)n ÷ 12 − 1, where n is 1 or 365. So a starting amount of $10,000 at 7% compounded annually grows to exactly $10,000 × 1.0710, about $19,672, after 10 years.
Monthly contributions are added at the end of each month and earn the same rate. Interest earned is the ending balance minus everything you put in. The rule of 72 divides 72 by the rate to estimate how long a lump sum takes to double; the note under your result gives the exact figure too.
If you enter an inflation rate, the ending balance is divided by (1 + inflation)years to show roughly what it would buy today. Taxes and fees aren’t included, and investment returns, unlike a fixed savings rate, vary from year to year.
Words you’ll see
- Compound interest
- Interest earned on both the money you put in and the interest it has already earned.
- Simple interest
- Interest paid only on the original amount. It grows in a straight line instead of a curve.
- Compounding frequency
- How often interest is added to the balance: once a year, once a month or every day.
- APY (annual percentage yield)
- The yearly growth a savings account pays once compounding is counted. It’s slightly higher than the stated rate when interest compounds more than once a year.
- Rule of 72
- A shortcut for doubling time: 72 divided by the yearly rate in percent gives the approximate years to double.
- Today’s dollars
- A future amount with inflation taken out, so you can compare it with prices now.
Common questions
How does compound interest work?
Compound interest means you earn interest on your interest, not just on the money you put in. Each period's interest is added to the balance, so the next period's interest is figured on a bigger number. Over time the growth speeds up, which is why time matters as much as the amount you save.
How much will $10,000 grow in 10 years?
At 7% a year compounded annually, $10,000 grows to about $19,672 in 10 years, almost double. Compounded monthly, it reaches about $20,097. At 5% compounded annually, it grows to about $16,289.
What is the rule of 72?
The rule of 72 estimates how many years money takes to double: divide 72 by the yearly interest rate. At 6% that is about 12 years, and at 9% about 8 years. It is a quick shortcut for a lump sum and is most accurate for rates between about 6% and 10%.
How often is interest compounded?
It depends on the account: many savings accounts compound daily or monthly, and some investments compound once a year. More frequent compounding earns slightly more, so $10,000 at 5% for one year grows to $10,500 compounded annually, $10,512 monthly and $10,513 daily. The rate and how long you leave the money matter far more than the frequency.
What's the difference between simple and compound interest?
Simple interest is paid only on the original amount, while compound interest is also paid on interest already earned. $10,000 at 5% simple interest earns $500 a year and reaches $15,000 after 10 years. Compounded annually, the same $10,000 reaches about $16,289.
Sources
- Compound Interest Calculator — U.S. Securities and Exchange Commission, Investor.gov
- Saving and Investing: A Roadmap to Your Financial Security Through Saving and Investing — U.S. Securities and Exchange Commission
- CPI Inflation Calculator — U.S. Bureau of Labor Statistics
This tool is for informational and educational purposes only. It is not financial, tax, or legal advice. Consult a qualified professional for guidance specific to your situation.