How to use the compound interest calculator
- Enter your starting amount.
- Enter the yearly interest rate and the number of years.
- Choose how often interest is compounded: yearly, quarterly, monthly or daily.
- Optionally add a monthly contribution.
- See the final balance, your total contributions, the interest earned and a year-by-year table.
How compound interest works
With simple interest, you earn interest only on your original deposit. With compound interest, each period's interest is added to your balance, and the next period's interest is calculated on the bigger amount. Your interest earns interest.
| Year | Simple interest (10,000 at 8%) | Compound interest (monthly) |
|---|---|---|
| 1 | 10,800 | 10,830 |
| 10 | 18,000 | 22,196 |
| 20 | 26,000 | 49,268 |
The gap grows faster the longer you leave the money, which is why starting early matters so much.
The rule of 72
For a quick estimate, divide 72 by the yearly interest rate to find roughly how many years it takes to double your money. At 8%, it takes about 9 years. At 6%, about 12.
Regular contributions
Adding a fixed amount every month usually matters more than chasing a slightly higher rate. Contributions are added each month in this calculator, and they start earning interest from the following compounding period.
Important caveats
- Returns aren't guaranteed. Savings accounts and fixed deposits have set rates, but investments such as shares and funds go up and down. A fixed rate in this calculator is a simplification.
- Tax on interest or gains reduces your real return.
- Inflation reduces what your future balance can buy. A 6% return with 4% inflation grows your buying power by only about 2% a year.
This is a learning and planning tool, not financial advice.
Related tools
To see the cost of borrowing instead, use the loan EMI calculator. All calculations run in your browser.