Compound Interest Calculator
Visualize how compound interest grows your money exponentially over time.
Important Notice
These calculators are for educational and informational purposes only. Results are estimates based on the information you provide and should not be considered financial, tax, or investment advice. Your actual results may vary. For personalized guidance, please consult a qualified financial advisor, tax professional, or other appropriate expert.
People Also Ask
What is compound interest and how does it work?
Compound interest is interest calculated on both the initial principal and accumulated interest from previous periods. This creates exponential growth - you earn interest on your interest, making your money grow faster over time.
How often should interest compound?
More frequent compounding yields higher returns. Daily compounding earns slightly more than monthly, which earns more than annually. For savings accounts, daily or monthly compounding is common.
What is the difference between APR and APY?
APR (Annual Percentage Rate) is the simple interest rate without compounding. APY (Annual Percentage Yield) includes compound interest effects. APY is always equal to or higher than APR for the same rate.
How does compound interest help my savings grow?
Compound interest accelerates growth over time. A $10,000 investment at 7% annually becomes about $20,000 in 10 years and $40,000 in 20 years - demonstrating how compounding doubles and redoubles your money.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your interest rate: at 6% annual return, your money doubles in approximately 12 years (72/6=12).
Does compound interest work against me with debt?
Yes, compound interest works both ways. Credit card debt compounds against you, which is why high-interest debt grows quickly if only minimum payments are made. The same math that grows savings also grows debt balances.