🔄 Compound Interest Calculator
See exactly how your savings or investments grow over time — with monthly contributions, multiple compounding frequencies, and year-by-year breakdown.
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📊 Growth Breakdown
How Compound Interest Works
Compound interest is interest earned on both your original principal and on all previously accumulated interest. Unlike simple interest, which only applies to the starting amount, compound interest creates exponential growth — your money earns more and more each period as the base grows.
The formula is: A = P(1 + r/n)^(nt) — where P is your starting amount, r is the annual rate, n is how often interest compounds per year, and t is the number of years. The key insight is the exponent: as time increases, the result grows exponentially rather than linearly.
Why Monthly Contributions Transform the Result
The calculator above lets you add a monthly contribution on top of your starting amount. This is where compound interest becomes genuinely transformative for everyday investors. Consider:
- $10,000 invested at 7% for 30 years (no contributions) → approximately $76,000
- $10,000 invested at 7% with $200/month for 30 years → approximately $313,000
- $0 invested at 7% with $200/month for 30 years → approximately $227,000
The monthly contributions in the second scenario add $72,000 of your own money over 30 years — but the final balance is $237,000 more than the lump sum alone. That difference is compounding working on your contributions over time.
The Rule of 72
A quick mental shortcut: divide 72 by your annual interest rate to estimate how many years it takes your money to double. At 6% — 72 ÷ 6 = 12 years to double. At 9% — 8 years. At 4% — 18 years. This rule reveals why even small differences in investment return rate matter enormously over decades.
Compound Interest Working Against You: Debt
The same mathematics that build wealth in savings work in reverse for debt. A $5,000 credit card balance at 22% APR that you only make minimum payments on will cost you over $18,000 in total interest and take more than 20 years to pay off. High-interest debt compounds faster than almost any investment can match — which is why eliminating high-interest debt before investing is almost always the right priority order.