Compound Interest Calculator

A compound interest calculator is a tool that shows how your money grows when you earn interest on your interest. You enter a starting amount, contributions, a return rate, and a time period. It then estimates your future balance. The calculator above also lets you pick how often interest compounds.

More frequent compounding earns slightly more, but the difference is small. On $10,000 at 5% over 10 years with no contributions, annual compounding grows to $16,289. Quarterly reaches $16,436, monthly $16,470, and daily $16,487. Time and your return rate matter far more than frequency.

The Rule of 72 is a quick way to estimate how long it takes money to double. You divide 72 by your annual return rate. At a 6% return, your money doubles in about 12 years; at 8%, about 9 years; at 4%, about 18 years. It is an estimate, not an exact figure, since it assumes a flat annual return with no added contributions, but it beats guessing when you want a doubling time in your head, not a spreadsheet. It also runs in reverse: divide 72 by the number of years you want money to double in, and the result is roughly the annual return you would need. For a plan that includes ongoing monthly contributions, run your own numbers through the compound interest calculator above instead, since it accounts for contributions and compounding frequency that the flat-rate shortcut ignores.

Yes. The Rule of 72 is a rounded shortcut for a more precise formula, ln(2) divided by the growth rate, which comes out closer to 69.3 for continuously compounded returns. 72 is used instead of 69.3 mainly because 72 divides evenly by more common return rates (2, 3, 4, 6, 8, 9, and 12), making the mental math easier, and the rounding stays reasonably accurate for annual returns in the 6% to 10% range where most long-term investing math lands. A related shortcut, the Rule of 70, swaps the doubling question for a shrinking one: divide 70 by an inflation rate to estimate how many years it takes purchasing power to fall by half. At a typical 3% long-run inflation assumption, that is about 23 years, which is why a fixed income or a static spending number quietly loses real value over a multi-decade retirement.

Compound interest grows money quickly because you earn returns on your past returns, not just your original deposit. Each year, the base that earns interest gets larger. This creates a snowball effect that speeds up the longer you stay invested, which is why starting early matters.

In a taxable brokerage account, investment earnings — dividends, interest, and realized capital gains — are taxed annually, which reduces your effective compounding rate. A 22% federal income tax bracket applied to a 10% nominal return leaves roughly 7.8% after tax on ordinary income (10% × (1 − 0.22) = 7.8%). Over 30 years the difference is dramatic: $10,000 growing at 10% reaches approximately $174,500, while the same amount at 7.8% reaches only about $96,000 — nearly half as much. Tax-advantaged accounts like a Roth IRA or 401(k) eliminate this annual drag entirely, which is why most advisors recommend maxing those before investing in taxable accounts.

It depends on your time horizon and whether you already have an emergency fund. Money you need within the next few years, or haven't yet set aside for emergencies, belongs in a high-yield savings account where it's stable and accessible. Money you won't touch for 5+ years can use this calculator's higher expected return to grow faster, in exchange for accepting market swings along the way.

The calculator above compounds monthly by default, which matches how most savings accounts and brokerage sweep accounts credit interest in practice. Use the compounding frequency control above to switch to annual, quarterly, or daily compounding and see how each option changes your result. This calculator always compounds. It has no setting for true simple interest, where you earn a return only on your original balance and never on interest already earned. To approximate that comparison, calculate simple interest by hand using principal times rate times years, then compare it against the calculator's output for the same period. Over a single year the two numbers land close together, since compounding hasn't had time to build on itself yet. Stretch the timeline to 10 or 20 years, and the compounded figure pulls further ahead every year, which is the entire reason compounding matters.