Compound Interest Calculator
See how money grows over time with compound returns. Time is the multiplier — see exactly how much.
Frequently Asked Questions
What is compound interest and how does it work?
Compound interest is interest earned on both your original principal and the interest already accumulated. Over time, this creates exponential growth. The effect is small in year one but massive over decades — which is why starting early matters most.
How often should interest compound for maximum growth?
More frequent compounding (daily vs. monthly vs. annually) produces slightly higher returns. Daily compounding on a $10,000 investment at 7% over 30 years yields about $1,800 more than annual compounding. The difference grows with larger amounts and higher rates.
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal amount each period. Compound interest is calculated on the principal plus all previously accumulated interest. Over 20 years, a $10,000 investment at 7% simple interest grows to $24,000; compounded annually, it reaches about $38,700.
How can I maximize compound growth with my investments?
Three levers: (1) Start as early as possible — time is the most powerful factor. (2) Reinvest all dividends and interest automatically. (3) Increase contributions regularly. Even small increases compound into significant differences over 20–30 years.
Does compound interest work the same for loans and savings?
Yes, but in opposite directions. On savings, compounding grows your money exponentially. On debts like credit cards, compounding grows what you owe. That's why high-interest debt grows so quickly and should be paid off before investing for compound growth.
Why this matters
$5,000 + $300/month at 7% for 30 years: you contribute $113,000. Your portfolio grows to $365,000. That $252,000 difference is compound interest doing the work you didn't have to do. Start 10 years later and that drops to $163K. Time is the multiplier.