Compound Interest Calculator
Compute interest on interest — with your choice of compounding frequency.
How Compound Interest Works
Compound interest pays you interest on your interest. Even a modest rate becomes meaningful over decades. At 8% annual compounding, money doubles roughly every 9 years (Rule of 72).
Formula
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both the original principal and previously accumulated interest. It accelerates growth over time, especially at high frequencies.
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest adds each period's interest to the principal, so the next period earns interest on a larger base.
Does compounding frequency matter a lot?
Over short horizons, not much. Over 20+ years, daily vs annual compounding can differ by several percent of the final corpus. Monthly is a common real-world default.
What is the compound interest formula?
A = P × (1 + r/n)^(n×t), where P is principal, r is annual rate, n is compounds per year, and t is years.
How do I maximise compound interest?
Start early, reinvest earnings instead of withdrawing, and choose investments with higher compounding frequency or higher effective rate.