Compound Interest Calculator
See how a lump sum grows over time with compound interest, at any compounding frequency.
- Starting amount$1,000.00 61%
- Interest earned$647.01 39%
- Rate per period0.42%
- Total compounding periods120
- Final amount$1,647.01
- Interest earned$647.01
Inputs used
- Starting amount$1,000.00
- Annual interest rate5 %
- Time invested10 years
- Compounds per year12
About this calculator
Compound interest means you earn interest on your interest: each period, the rate applies to the running balance rather than just the original deposit. Over long horizons this produces exponential growth — the final amount is the starting sum multiplied by (1 + rate per period) raised to the number of periods.
Compounding frequency matters less than people expect: moving from annual to monthly compounding helps, but the big levers are the rate and, above all, time. Doubling the number of years does far more than doubling the compounds per year.
Quick reference
Growth of $10,000 by years and annual rate
Final balance with monthly compounding, no further deposits.
| Time invested | 2% | 4% | 6% | 8% | 10% |
|---|---|---|---|---|---|
| 5 years | $11,050.79 | $12,209.97 | $13,488.50 | $14,898.46 | $16,453.09 |
| 10 years | $12,211.99 | $14,908.33 | $18,193.97 | $22,196.40 | $27,070.41 |
| 15 years | $13,495.22 | $18,203.02 | $24,540.94 | $33,069.21 | $44,539.20 |
| 20 years | $14,913.28 | $22,225.82 | $33,102.04 | $49,268.03 | $73,280.74 |
| 25 years | $16,480.35 | $27,137.65 | $44,649.70 | $73,401.76 | $120,569.45 |
| 30 years | $18,212.09 | $33,134.98 | $60,225.75 | $109,357.30 | $198,373.99 |
Frequently asked questions
What is the Rule of 72?
A quick mental estimate of doubling time: divide 72 by the annual rate to get the years it takes money to double. At 6% that's about 12 years; at 8%, about 9 years. It's an approximation, but remarkably accurate for rates under about 15%.
How much does compounding frequency actually matter?
Less than the rate or the time. $10,000 at 6% for 10 years grows to about $17,908 with annual compounding and about $18,194 with monthly — a difference of under 2%. Moving from 6% to 7%, or from 10 years to 12, changes the outcome far more.
What is the difference between simple and compound interest?
Simple interest is paid only on the original principal, so growth is linear. Compound interest is paid on the running balance — principal plus accumulated interest — so growth is exponential and pulls further ahead the longer the money is invested.
Does this account for inflation?
No — the result is a nominal balance. To think in today's purchasing power, subtract expected inflation from the rate: a 6% return with 3% inflation grows real wealth at roughly 3% a year.
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Results are informational only — not financial, medical or legal advice.