Compound Interest Calculator
Forecast future investment growth with custom compounding intervals and deposits.
Compound Growth Timeline
Principal vs Interest| Year | Deposited | Interest Earned | Total Balance |
|---|
Future Balance
Over 10 Years @ 8% Quarterly
Related Financial Calculators
Understanding the Compound Interest Formula
The Classic Formula
For a single lump sum deposit:
- A = Final compound amount
- P = Initial principal balance
- r = Annual interest rate (decimal)
- n = Compounding frequency per year
- t = Time in years
Rule of 72
A handy mental math shortcut to estimate how many years it takes for your investment to double:
At a 12% interest rate, your wealth doubles every 6 years (72 ÷ 12 = 6). In 24 years, your initial principal multiplies by 16 times!
Frequently Asked Questions (FAQs)
What is the difference between simple and compound interest?
Simple interest is only calculated on your initial deposit. Compound interest calculates interest on both the principal and previously accumulated interest, leading to rapid exponential growth over time.
How does compounding frequency impact returns?
The more frequently interest is added to your account (e.g. daily vs annually), the quicker that interest starts earning interest of its own. Daily compounding generates higher total returns than annual compounding at the same nominal rate.