Calculate how your money grows with compound interest over time.
Result
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Future Value
Total Deposits-
Total Interest Earned-
Effective Annual Rate-
Total Deposits
Total Interest Earned
Yearly Breakdown
Year
Deposits
Interest
Balance
⚙️ How It Works
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which only earns on the principal), compound interest causes exponential growth. The more frequently interest compounds, the faster your money grows.
A = P(1 + r/n)^(nt) where A = final amount, P = principal, r = annual rate (decimal), n = compounds per year, t = years | Simple Interest: A = P(1 + rt)
Editorial Standards
Author
BetterProduct Finance Research Team - Formula review and consumer finance editorial QA
Reviewed by
Reviewed against compound-interest references and standard exponential growth formulas.
Updated
April 2026
Best used for
Understanding compounding and comparing contribution scenarios.
Languages checked
7 language editions aligned from the same source formulas.
Use Results Responsibly
Compare at least two scenarios before making a decision.
Keep rates, periods, and fees in the same unit system.
Verify taxes, insurance, and lender-specific rules with official documents.
The Rule of 72 estimates how long it takes to double your money: divide 72 by the annual interest rate. At 6% annual return, your money doubles in 72/6 = 12 years. At 9%, it doubles in 8 years. It's a quick mental math shortcut.
How does compounding frequency affect growth?
More frequent compounding yields slightly more. $10,000 at 5% for 10 years: annual compounding = $16,289; monthly = $16,470; daily = $16,487. The difference is small at typical rates but grows with higher rates and longer periods.
What is the effective annual rate (EAR)?
EAR is the actual annual return accounting for compounding frequency. A 12% nominal rate compounded monthly has an EAR of (1 + 0.12/12)^12 − 1 = 12.68%. EAR allows fair comparison between investments with different compounding periods.
How does inflation affect compound growth?
Inflation erodes purchasing power. If your investment earns 7% but inflation is 3%, your real return is approximately 4%. Use the real return rate when projecting future purchasing power: Real Rate ≈ Nominal Rate − Inflation Rate.