Compound Interest Calculator
Calculate how your investments grow over time with compound interest and monthly contributions.
How Compound Interest Works
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It's often called "interest on interest" and is a powerful force for growing your money over time.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns interest on the original amount, compound interest grows exponentially over time.
How often is interest compounded?
Interest can be compounded annually, semi-annually, quarterly, monthly, or daily. The more frequently interest is compounded, the faster your money grows. Most savings accounts compound daily or monthly.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your annual interest rate. For example, at 8% interest, your money doubles in approximately 9 years (72 ÷ 8 = 9).
How do monthly contributions affect compound interest?
Regular monthly contributions dramatically accelerate wealth building. Even small consistent additions benefit from compound interest, as each contribution begins earning its own interest immediately.