01
What Is Compound Interest
Compound interest is interest earned on interest, so your savings grow exponentially the longer they are invested.
💹 Compound Interest Calculator
See how compound interest grows your savings over time.
Investment Details
Final Amount
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Initial Principal —
Interest Earned —
Simple vs Compound Interest
Compound Interest —
Simple Interest —
💰 Compounding Benefit — Extra earnings vs simple interest: —
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02
The Impact of Compounding Frequency
The more often interest compounds (daily > monthly > yearly), the more interest you earn.
03
Why Long-Term Investing Matters
The compounding effect is maximised over the long term. Time is the single most important factor in investing.
04
The Compound Interest Formula
A = P(1 + r/n)^(nt), where P is the principal, r is the rate, n is the number of compounding periods per year, and t is the number of years.
05
The Rule of 72
The time for an investment to double is roughly 72 divided by the interest rate. For example, a 7% return takes about 10.3 years.
06
Start Investing Early
To make the most of compounding, it is important to start investing as early as possible.
Questions fréquentes
How much difference does the compounding frequency make?
For the same annual rate, more frequent compounding (daily vs monthly vs yearly) produces a slightly higher final amount. The gap is small for short periods or low rates, but grows noticeably over long periods or with higher rates.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal, while compound interest also earns interest on previously earned interest. The comparison result shows how much extra you gain with compounding over the same term.
Does this calculator account for tax or inflation?
No, this is a nominal compound interest calculation only. It does not deduct tax, fees or account for inflation, so your real return may be lower than the figure shown.
Can I include regular monthly contributions in this calculation?
This calculator assumes a single lump-sum investment. If you want to model regular ongoing deposits as well, you will need a dedicated recurring-contribution compound interest tool.
Should I enter a nominal annual rate or a periodic rate?
Enter the nominal annual interest rate (APR). The calculator automatically converts it based on the compounding frequency you select.