Compound Interest Calculator
Free online compound interest calculator — calculate final amount, total contributions, total interest earned and growth percentage with daily, monthly, quarterly, half-yearly or annual compounding. Includes growth chart and year-by-year breakdown.
Compound interest formula
The core compound interest formula (without contributions) is:
- A = final amount
- P = principal (starting amount)
- r = annual interest rate (decimal)
- n = compounding times per year
- t = time period in years
When you add monthly contributions, each deposit also compounds from the month it is added — this calculator models that automatically.
Step-by-step calculation
Calculate above to see your personalised step-by-step working.
What is Compound Interest?
Compound interest is the interest you earn on both your original money and the interest it has already earned. Often called 'interest on interest', it is one of the most powerful forces for building long-term wealth because your balance grows faster the longer you stay invested.
How Compound Interest Works
Each compounding period, interest is added to your balance. The next period's interest is then calculated on this larger balance. The more frequently interest compounds — daily, monthly, quarterly — and the longer the time horizon, the greater your final amount.
Examples of Compound Interest
Invest $10,000 at 8% compounded monthly for 10 years and it grows to about $22,196 — more than doubling with zero extra deposits. Add $100 every month and the final amount climbs well beyond $40,000, showing how regular contributions supercharge growth.
Tips to Grow Wealth Faster
Start as early as possible, contribute consistently every month, reinvest your returns instead of withdrawing them, seek accounts with higher rates and more frequent compounding, and stay patient — compounding rewards time more than anything else.
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, your money earns interest on interest, which accelerates growth over time.
How often should interest compound?
The more frequently interest compounds, the more you earn. Daily compounding yields slightly more than monthly, which beats quarterly, half-yearly and annually. Many savings accounts compound daily or monthly.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal, so it grows linearly. Compound interest is calculated on principal plus accumulated interest, so it grows exponentially — making a big difference over long periods.
How can I maximize returns?
Start early to give compounding more time, add regular monthly contributions, choose accounts with higher rates and more frequent compounding, and avoid withdrawing your interest so it keeps compounding.