Compound Interest Calculator

Compound interest is interest earned on both your initial investment and previously earned interest. Unlike simple interest where you earn interest only on the principal, compound interest allows your money to grow exponentially because you earn interest on top of interest over time.

Yes, more frequent compounding results in slightly higher returns. Daily compounding yields more than monthly, which yields more than quarterly or annually. The difference is usually small for typical savings accounts but can add up significantly over long periods with large sums.

The Rule of 72 is a quick way to estimate how long it takes for an investment to double. Simply divide 72 by your annual interest rate. At 7% return, your money doubles in approximately 72/7 = 10.3 years. This is useful for quick mental calculations when planning investments.

Regular monthly contributions dramatically increase your final balance through the power of compound interest. Adding $500 monthly to a 7% return over 10 years can contribute tens of thousands of dollars beyond your initial investment. The sooner you start contributing, the more time your money has to compound.

No. All calculations happen locally in your browser. Your financial information never leaves your device and is not stored anywhere. This ensures complete privacy for any financial planning you do with this calculator.

Historical stock market averages around 7-10% annually after inflation, but actual returns vary. Conservative investments like savings accounts may yield 1-5%. For retirement planning, financial advisors often use 6-7% as a reasonable long-term assumption. Consider your risk tolerance and investment timeline when choosing a rate.