Compound Interest Calculator
Albert Einstein called it the "8th wonder of the world." Use our professional tool to visualize how your money grows over time through the magic of compounding.
The Anatomy of Wealth: How Compounding Works
Compound Interest (CI) is the interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods. In simple terms, it is "interest on interest." This creates a snowball effect where your wealth grows exponentially over time.
The Wealth Formula
A = P(1 + r/n)nt- A = Final Amount
- P = Initial Principal
- r = Annual Interest Rate
- n = Compounding Frequency
- t = Number of Years
Frequency Matters
The more frequently interest is added to your account, the faster your balance grows.Monthly compounding earns you more than yearly compounding at the exact same interest rate. Our tool lets you toggle between all standard frequencies to see the "Frequency Bonus."
The "Rule of 72"
A quick mental trick for compound interest is the Rule of 72. Divide 72 by your annual interest rate to find out approximately how many years it will take for your money to double.
Example: At 8% interest, your money doubles in 72 / 8 = 9 years.
Compounding for Loans vs. Investments
Compounding is a double-edged sword. While it is your greatest ally when **investing** (like in a Savings Account or FD), it is your enemy when you have **debt** (like Credit Card interest). High-interest debt compounds rapidly, which is why many people struggle to pay off credit cards once the balance starts growing.
Maximize Your Compound Effect
The two most important factors in compounding are Time and Consistency. Starting 5 years earlier can often result in significantly more wealth than investing twice the amount of money later in life.