See how an investment grows over time with compounding. Enter your starting amount, annual rate, term and how often interest compounds. Add an optional deposit made each period to model regular saving.
Final balance$1,647
Total you put in$1,000
Interest earned$647
How this calculation works
The principal grows by A = P × (1 + i)ⁿ, where i is the rate per compounding period and n is the number of periods.
A recurring deposit added each period grows as an annuity: C × ((1 + i)ⁿ − 1) ÷ i. The two parts are added for the final balance.
Interest earned is the final balance minus everything you put in (principal plus all deposits). More frequent compounding earns slightly more.
Worked example
1,000 at 5% for 10 years compounded monthly with no deposits grows to about 1,647.01 — of which 647.01 is interest.
The Rule of 72
A fast mental shortcut: divide 72 by the annual interest rate to estimate the years for money to double. At 6%, money doubles in about 72 ÷ 6 = 12 years; at 9%, about 8 years. It is an approximation but remarkably close for typical rates.
Why compounding frequency matters
1,000 at 10% for one year, compounded at different frequencies:
Compounding
Balance after 1 year
Annually
1,100.00
Quarterly
1,103.81
Monthly
1,104.71
Daily
1,105.16
The power of starting early
Because interest earns its own interest, time matters more than amount. An investor who saves for ten years then stops can end up ahead of one who starts ten years later and saves for decades. The earliest contributions have the longest to compound.
Nominal vs. real returns
This calculator shows nominal growth. Inflation erodes purchasing power, so a "real" return subtracts the inflation rate, and interest may be taxed. To judge whether your money is truly growing, compare the return with inflation.
Frequently asked questions
What does compounding frequency change?
How often earned interest is added back to the balance. Daily compounding earns a little more than annual because interest starts earning interest sooner, though the difference is usually small.
How is the recurring deposit applied?
It is added once each compounding period. If you compound monthly, the deposit is treated as monthly; if annually, as annual.
Does this account for tax or inflation?
No. It shows nominal growth before any tax on interest and without adjusting for inflation, so real purchasing power will be lower.
What is the Rule of 72?
Divide 72 by the annual rate to estimate years to double your money. It is a quick approximation of compound growth that works well for rates roughly between 4% and 12%.
Simple vs. compound interest — what changes?
Simple interest is paid only on the original principal. Compound interest also pays interest on previously earned interest, so balances grow faster and faster over time.
Does compounding frequency change much?
A little. More frequent compounding earns slightly more, but the difference between monthly and daily is small. The rate and the time horizon matter far more.
How do fees affect the result?
Fees compound against you. A 1% annual fee may sound tiny but over decades it can consume a large share of final returns, so low-cost investing preserves compounding.