Compound Interest Calculator
Calculate compound interest with customizable compounding frequency and optional monthly contributions. See year-by-year growth breakdowns for free.
Future Value
$20,096.61
Total Interest Earned
$10,096.61
Total Contributions
$10,000.00
| Year | Start Balance | Contributions | Interest | End Balance |
|---|---|---|---|---|
| 1 | $10,000.00 | $0.00 | $722.90 | $10,722.90 |
| 2 | $10,722.90 | $0.00 | $775.16 | $11,498.06 |
| 3 | $11,498.06 | $0.00 | $831.20 | $12,329.26 |
| 4 | $12,329.26 | $0.00 | $891.28 | $13,220.54 |
| 5 | $13,220.54 | $0.00 | $955.71 | $14,176.25 |
| 6 | $14,176.25 | $0.00 | $1,024.80 | $15,201.06 |
| 7 | $15,201.06 | $0.00 | $1,098.89 | $16,299.94 |
| 8 | $16,299.94 | $0.00 | $1,178.32 | $17,478.26 |
| 9 | $17,478.26 | $0.00 | $1,263.51 | $18,741.77 |
| 10 | $18,741.77 | $0.00 | $1,354.84 | $20,096.61 |
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which is only calculated on the principal, compound interest grows exponentially over time.
How does compounding frequency affect returns?
More frequent compounding leads to higher returns. Daily compounding produces slightly more than monthly, which produces more than annually. However, the difference between daily and monthly compounding is relatively small for most interest rates.
What is the compound interest formula?
The formula is A = P(1 + r/n)^(nt), where A is the future value, P is the principal, r is the annual interest rate (decimal), n is the number of times interest compounds per year, and t is the number of years.
How do monthly contributions affect compound interest?
Regular monthly contributions significantly boost your returns because each contribution also earns compound interest. Even small monthly additions can make a big difference over long time periods due to the compounding effect.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for an investment to double. Divide 72 by the annual interest rate to get the approximate number of years. For example, at 6% interest, it takes roughly 72/6 = 12 years to double your money.