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How this compound interest calculator works
Enter an initial deposit, an optional monthly contribution, an interest rate and how long the money will grow. The calculator works out your balance at the end of every year, compounding at whichever frequency you choose, and adds each month's contribution along the way. Every figure updates live as you type, so you can test a higher contribution or a longer horizon and see the effect immediately.
How compound interest is calculated
Compound interest grows a balance faster than simple interest. Each round of interest is added to the balance before the next round is calculated, so you earn interest on your interest — not just on your original deposit. This calculator converts your chosen compounding frequency into an exact equivalent monthly rate. It then grows your initial deposit and adds each monthly contribution on top, compounding every month for the number of years you set.
The breakdown on the result panel splits your final balance into three parts: your starting deposit, the contributions you added along the way, and the interest earned on top of both. That last figure — interest earned — is the part compounding actually creates for you.
Why compounding frequency matters
The nominal interest rate is only part of the story — how often it's credited changes the outcome too. Annual compounding credits interest once a year; daily compounding credits it every day, so each day's interest starts earning its own interest almost immediately. At typical savings and investment rates the difference between monthly and daily compounding is usually small, but it grows with higher rates and longer time horizons. Switch the frequency buttons above and watch the future balance move.
A quick shortcut: the Rule of 72
Before running exact numbers, the Rule of 72 gives a fast mental estimate: divide 72 by your annual interest rate to see roughly how many years it takes a lump sum to double. At 6% that's about 12 years; at 9% it's about 8 years. It's an approximation that ignores contributions and compounding frequency, but it's a useful gut check before you dig into the exact figures above.
Ways to grow your balance faster
- Start earlier — time in the market does more work than almost any other lever, because early contributions compound for longer.
- Automate a monthly contribution, even a small one — consistency compounds just like the balance does.
- Shop for a better rate on savings or investment accounts; the gap between average and top rates is often larger than people expect.
- Reinvest any interest or dividends rather than withdrawing them, so they keep compounding.
Frequently asked questions
What is compound interest?
Interest earned on both your original deposit and on the interest it has already earned. Each time interest is credited it's added to your balance, and the next round of interest is calculated on that larger amount — so growth accelerates over time.
How does compounding frequency affect my balance?
More frequent compounding credits interest more often, so each credit starts earning its own interest sooner. Daily compounding grows a balance slightly faster than annual compounding at the same nominal rate, though the difference is usually small at typical savings rates.
Does this calculator include regular contributions?
Yes. Enter a monthly contribution and it's added every month on top of the compounding growth from your initial deposit. The breakdown shows how much of your final balance is money you put in versus interest you earned.
What is the Rule of 72?
A quick mental shortcut: divide 72 by your annual interest rate to estimate how many years it takes a lump sum to double. At 6% interest, 72 ÷ 6 = 12 years. It's an approximation, not an exact calculation.
Are my numbers saved or sent anywhere?
No. Nothing you enter leaves your device. The math runs entirely in your browser, and the optional share link only stores the numbers you choose to share inside the link itself.
How accurate is the estimate?
The math is exact for the rate, frequency and contributions you enter. Real-world returns vary over time, and this tool assumes a constant rate for the whole period, so treat the result as a planning estimate rather than a guarantee.