Compound Interest Calculator
The compound interest calculator computes the final amount using A = P*(1 + r/n)^(n*t), where P is principal, r is annual rate, n is compounding frequency per year, and t is years. Unlike simple interest, compound interest earns interest on accumulated interest, resulting in exponential growth. This calculator shows the year-by-year balance growth in a table below. Select the compounding frequency (annually, semi-annually, quarterly, monthly, or daily).
Formula
A = P * (1 + r/n)^(n*t)
Interest = A - P
where r is the decimal form of the rate
Year-by-year growth
The three levers of compounding
Compound growth has only three inputs you can pull: the rate of return, the length of time and the frequency of compounding. Of the three, time is by far the most powerful, because it is the exponent, not a multiplier. Money left to grow does not add value in a straight line; it curves upward, and the steepest part of that curve is always at the end, which is exactly why starting earlier tends to beat saving more.
A useful shortcut is the rule of 72: divide 72 by the annual percentage rate to estimate the years it takes an amount to double. At 6 percent that is about 12 years, at 8 percent about 9. It reveals how much the rate matters over long horizons, and how a fee or an inflation drag of even one or two percent quietly steals doublings you would otherwise have had.
Two honest caveats. Compounding frequency (daily versus monthly versus annual) changes the result only modestly compared with rate and time, so do not over-optimise it. And a calculator assumes a smooth, constant return; real markets do not deliver that, so treat the projection as the shape of the outcome, not a promise of the exact figure.
Compound interest calculator: frequently asked questions
What is compound interest?
Compound interest is interest earned on both the principal and accumulated interest. The formula is A = P*(1 + r/n)^(n*t), where P is principal, r is annual rate, n is compounding frequency per year, and t is years.
What is the difference between daily and monthly compounding?
Daily compounding calculates interest 365 times per year. Monthly compounding calculates 12 times per year. More frequent compounding results in slightly higher final amounts.
Which compounding frequency is best?
For savers, daily compounding is best (more interest earned). For borrowers, annual compounding is best (less interest paid). Most savings accounts use daily compounding.
What if compounding is continuous?
For continuous compounding, use the formula A = P*e^(r*t). See the continuous compound interest calculator for this.
How much difference does compounding frequency make?
For short periods or low rates, the difference is small. For long periods or high rates, more frequent compounding can make a significant difference.
Official sources
- Wikipedia: Compound Interest.
- Wolfram MathWorld: Compound Interest.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.