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Compound Interest Calculator

Calculate how your investment grows over time with compound interest.

Principal amount ($)

Annual interest rate (%)

Time period (years)

Compounding frequency

Monthly contribution ($) (optional)

Quick scenarios:

What is this tool?

A compound interest calculator shows how your money grows over time when interest is earned on both your initial investment and the accumulated interest. It is one of the most powerful concepts in finance — Albert Einstein reportedly called it the eighth wonder of the world. This tool helps you visualise long-term investment growth instantly.

How to Use — Step by Step

Enter your principal amountInput the initial amount you are investing or the starting balance of your savings account.

Set the annual interest rateEnter the annual interest rate as a percentage. Check your savings account, investment or bond prospectus for this figure.

Choose compounding frequencySelect how often interest is compounded — daily, monthly, quarterly or annually. More frequent compounding results in higher returns.

Set the time periodEnter how many years you plan to invest for. The longer the period, the more dramatic the compounding effect.

Common Uses

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Savings Accounts

See exactly how much your savings will grow in 5, 10 or 20 years with compound interest.

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Investment Planning

Compare returns from different investment options and interest rates to make informed decisions.

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Education Funds

Calculate how much to save monthly to reach a target amount for a child's education fund.

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Mortgage Planning

Understand how compound interest affects the total amount you repay on a mortgage over time.

Frequently Asked Questions

What is compound interest?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It causes money to grow exponentially over time.

How is compound interest different from simple interest?

Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus all previously earned interest, resulting in much higher returns over time.

What is the compound interest formula?

A = P(1 + r/n)^(nt), where A = final amount, P = principal, r = annual rate (decimal), n = compounding frequency per year, t = years.

How often should interest compound for maximum growth?

Daily compounding gives the highest return, followed by monthly, quarterly and annually. The difference between daily and monthly compounding is usually small for most savings accounts.