How do I calculate compound interest manually?

Multiply principal by (1 + r / n)^(n x t), where r is the annual rate and n is compounding periods. Subtract the original principal to isolate interest.

What's the difference between APR and APY?

APR is the nominal yearly rate without compounding. APY includes the effect of compounding, so APY is higher when interest is posted more than once per year.

Is daily compounding better than monthly?

Daily compounding posts interest 365 times versus 12 for monthly, so balances end slightly higher over long horizons or at higher rates.

How long will it take for my money to double?

Use the Rule of 72 as a shortcut: divide 72 by your annual rate. The calculator refines this using your frequency, contributions, inflation, and taxes.

What is a good interest rate?

High-yield savings may pay around 4-5% APY. Diversified index portfolios historically return 6-9% over decades with volatility, while bonds and CDs are steadier but lower.

Can I lose money with compound interest?

Yes, if the underlying investment falls or if fees and taxes outweigh gains. Use conservative assumptions, diversify, and review after-tax, inflation-adjusted results.

How often should I contribute to maximize growth?

Automating monthly or biweekly contributions builds consistency and increases the compounding base. Even small recurring deposits add up over time.

Can I use this for loans or inflation planning?

Yes. Treat principal as the balance and contributions as payments for loans, or add inflation to estimate real purchasing power for savings and retirement goals.

Free Compound Interest Calculator | Compound Interest Easy

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50-year compounding study

We charted a $10,000 balance growing at 5% over 50 years to compare daily versus annual compounding. Even a small difference in frequency adds up over long horizons.

Example only. Charts use simplified assumptions to illustrate the power of compounding; not financial advice.

Beginner's guide to compound interest

Compound interest means you earn interest on your original principal plus any interest that has already been added. Over time, this "interest on interest" effect can accelerate your growth.

Formula: A = P (1 + r/n)^n×t

P: principal (your starting amount)
r: annual interest rate (as a decimal, e.g., 5% = 0.05)
n: compounding periods per year (12 for monthly, 365 for daily, etc.)
t: time in years

Example 1: If you invest $10,000 at 5% annual interest, compounded monthly for 10 years, enter Principal = 10000, Rate = 5, Frequency = Monthly, Years = 10. The calculator shows the final balance, total interest, and other metrics instantly.

Example 2: Add monthly contributions: Principal = 10000, Rate = 7%, Frequency = Monthly, Years = 20, Monthly contribution = 200. You'll see how recurring deposits drive faster growth.

Learn exactly how the math works or read more guides and examples.

How to read your results

Total contributions

The sum of your starting principal and all recurring deposits. It shows how much of the final balance came from your own inputs.

Total interest earned

The growth generated by compounding. Use it to see how time, rate, and frequency affect your gains.

Final balance

Your projected account value at the end of the period, before any inflation or tax adjustments.

Inflation-adjusted balance

Your final balance translated into today's dollars, using the inflation rate you entered. It helps you judge real purchasing power.

After-tax balance

Shows the impact of taxes on interest earned, based on the tax rate you set. It's a simplified view to help plan conservatively.

Years to double (Rule of 72)

An estimate of how long it takes your money to double at your chosen rate. It's a quick benchmark to compare different scenarios.

Strategies to grow your money faster

Start early vs. start late

Time in the market beats timing the market. Even small deposits started early can outgrow larger deposits started later. Try adjusting this in the calculator above to see the impact.

Increase monthly contributions

Raising contributions over time (e.g., after raises) boosts the compounding base. Try adjusting this in the calculator above to see the impact.

Use realistic interest rates

Pick rates that match your risk tolerance and historical averages; avoid overly optimistic assumptions. Try adjusting this in the calculator above to see the impact.

Consider compounding frequency

More frequent compounding (monthly vs. annual) can slightly increase growth over long horizons. Try adjusting this in the calculator above to see the impact.

Risks, assumptions, and limitations

Returns are not guaranteed; markets can be volatile.
Inflation rates change over time and reduce purchasing power.
Taxes vary by location and account type; this calculator uses a simplified tax estimate.
Currency changes can affect international investors.

This tool uses simplified assumptions for education only and is not financial advice.