Compound Interest Calculator
Watch your money grow. See the power of compound interest with regular contributions over time.
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Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It makes your money grow exponentially over time, which is why it's often called "the eighth wonder of the world."
How does compounding frequency affect my returns?
More frequent compounding means interest is calculated on a slightly larger balance more often, resulting in slightly higher returns. The biggest jump is from annual to monthly compounding. The difference between monthly and daily is usually small.
What is the compound interest formula?
The basic formula is A = P(1 + r/n)nt, where A is the final amount, P is the principal, r is the annual interest rate (decimal), n is compounding periods per year, and t is years. With regular contributions, the future value of annuity formula is added.
What is the Rule of 72?
A quick way to estimate how long it takes to double your money: divide 72 by your annual interest rate. At 8% interest, your money doubles in approximately 72 ÷ 8 = 9 years.
How much should I contribute monthly?
Financial advisors generally recommend saving 15-20% of gross income for retirement. Even small monthly contributions can grow dramatically thanks to compound interest — starting early matters more than the exact amount.