Compound Interest Calculator

Calculate compound interest growth over time with reinvestment.

Principal ($)

Annual Rate (%)

Time (Years)

Compounding Frequency

About the Compound Interest Calculator

Compound interest is interest calculated on both the original principal and the interest that's already accumulated. Over long periods, this compounding effect can make a meaningful difference compared to simple interest, especially with regular contributions.

This calculator projects how an investment or savings balance grows over time given a starting amount, interest rate, compounding frequency, and time horizon — useful for retirement planning, savings goals, or comparing investment options.

How to Use This Tool

1Enter your initial principal (starting amount).
2Enter the annual interest rate and how often it compounds (annually, monthly, daily, etc.).
3Enter the number of years you plan to let it grow.
4Optionally add a regular contribution amount to see how ongoing deposits affect the total.

How compound interest is calculated

A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.

More frequent compounding (daily vs. annually) produces a slightly higher return for the same stated rate, because interest starts earning interest sooner.

Frequently Asked Questions

What's the difference between compound and simple interest?

Simple interest is calculated only on the original principal every period. Compound interest is calculated on the principal plus any interest already earned, so the growth accelerates over time.

Does compounding frequency matter much?

It matters more over long time horizons and at higher rates. For short periods or small rates, the difference between monthly and annual compounding is usually modest.

Is this the same as APY?

Annual Percentage Yield (APY) already accounts for compounding frequency, so it reflects the effective annual return. This calculator lets you see that effect explicitly by choosing a compounding frequency.