Compound Interest Calculator
The most powerful force in finance. See what time + consistency builds.
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The same arithmetic that makes a head start powerful makes a delay expensive. Saving $500/month at 7% for 30 years builds about $603,000; starting five years late and stopping 30 years after your first payment leaves roughly $205,000 less — and catching up takes $753/month, not $500. See the math, with the sources — updated monthly from Freddie Mac, Case-Shiller and Census data.
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Try the free investment calculator →How This Works
Compound interest is interest earned on interest. As your investment grows, each period's return is calculated
on a larger base, creating exponential growth over time.
The Rule of 72: Divide 72 by your annual return rate to estimate how many years it takes
to double your money. At 8% return, your money doubles roughly every 9 years.
How compound interest works — APY vs APR and the Rule of 72 ▸
Einstein allegedly called compound interest the "8th wonder of the world." Whether he said it or not, the math is undeniable. Use our free compound interest calculator to see how much your money can grow.
Compound vs. Simple Interest
Simple interest: You earn interest on the principal only.
Compound interest: You earn interest on your interest. That's the magic.
Example: $10,000 at 7% for 30 years:
- Simple interest: $31,000 total
- Compound interest: $76,123 total
Compound interest more than doubles your return.
APY vs. APR: Know the Difference
- APR — Annual Percentage Rate (nominal rate)
- APY — Annual Percentage Yield (includes compounding)
A 5% APR compounded monthly = 5.12% APY. A 5% APR compounded daily = 5.13% APY. Small differences add up over decades.
The Rule of 72
Quick mental math: Divide 72 by your interest rate to see how many years it takes to double your money.
- At 6%: 72 ÷ 6 = 12 years to double
- At 10%: 72 ÷ 10 = 7.2 years to double
Real-World Examples
| Scenario | Final Amount |
|---|---|
| $500/month at 7% for 20 years | $260,000 |
| $1,000/month at 10% for 30 years | $2.26 million |
| $10,000 lump sum at 8% for 40 years | $217,000 |
💡 Find the Best Savings Rate
Savings rates vary widely between banks, and online institutions have often paid more than the big-bank average. Check current rates before you move money.
Try the free compound interest calculator →The Bottom Line
Time is your biggest asset. Start early, even with small amounts. Use our compound interest calculator to experiment with different rates, contributions, and timeframes.
Related: Retirement Calculator: How Much Do You Need? | Investment Calculator Guide
How Compound Interest Works
Compound interest is interest on interest. Each year you earn a return on what you put in and on everything you have already earned, so growth speeds up the longer you leave it alone.
Example: $10,000 invested once at an 8% annual return, compounded yearly, with nothing added.
| Year | Balance | Interest earned that year |
|---|---|---|
| 1 | $10,800 | $800 |
| 5 | $14,693 | $1,088 |
| 10 | $21,589 | $1,599 |
| 20 | $46,610 | $3,453 |
| 30 | $100,627 | $7,454 |
Year 30 earns more than nine times what year 1 did, without a single dollar added. Add $500 a month to that same $10,000 (8%, compounded monthly) and after 30 years you have about $854,537: $190,000 you put in and $664,537 of interest.
Rule of 72: divide 72 by your annual return to estimate how many years it takes to double. At 8%, that is about 9 years.