Compound Interest Calculator
See how your money grows over time
Calculate compound interest with different compounding frequencies. Choose between daily, monthly, quarterly, semi-annual, or annual compounding to see the impact on your returns.
What is Compound Interest?
Compound interest is the interest calculated on both the initial principal and the accumulated interest from previous periods. Albert Einstein reportedly called it "the eighth wonder of the world" — and for good reason.
Unlike simple interest (calculated only on the principal), compound interest grows exponentially. The more frequently interest is compounded, the faster your money grows. This is why savings accounts, CDs, and investment accounts specify their compounding frequency.
Compound Interest Formula
Where: A = Final amount, P = Principal, r = Annual interest rate (decimal), n = Compounding frequency per year, t = Time in years
Example: $10,000 at 7% compounded monthly for 10 years: A = 10000(1 + 0.07/12)^(12×10) = $20,096.61. Your money doubled without you doing anything.
Impact of Compounding Frequency
For $10,000 at 7% for 10 years:
- Annual: $19,671.51
- Quarterly: $19,996.40
- Monthly: $20,096.61
- Daily: $20,137.53
The difference between annual and daily compounding is $466 on a $10,000 investment — not life-changing, but it adds up on larger amounts and longer time periods.