2026 Compound Interest Calculator

See how your investments grow over time

Initial Investment ($)

Monthly Contribution ($)

Annual Interest Rate (%)

Time Period (years)

Compound Frequency

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Future Value

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Total Contributions

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Interest Earned

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Interest % of Total

Growth Over Time

Contribution vs Interest

Your Investment Could Grow To

Based on your inputs over 0 years

Understanding Compound Interest

Compound interest is often called the "eighth wonder of the world" for its powerful ability to grow wealth over time. Unlike simple interest, which only earns interest on the principal amount, compound interest earns interest on both the principal and previously earned interest.

The formula for compound interest with regular contributions is:

A = P(1 + r/n)^(nt) + PMT × (((1 + r/n)^(nt) - 1) / (r/n))

Where: A = Future Value, P = Principal, r = Annual Interest Rate, n = Compounding Frequency, t = Time in Years, PMT = Regular Payment

The Power of Starting Early

Time is your greatest ally when it comes to compound interest. The earlier you start investing, the more time your money has to grow exponentially. Even small amounts invested early can outpace larger amounts invested later.

More time allows for exponential growth through compounding cycles
Early investments benefit from decades of market growth
Starting young means lower monthly contributions needed for the same goal
Compound interest accelerates wealth building over longer periods
Early investors can weather market volatility better with time on their side

Frequently Asked Questions

Compound interest is interest calculated on the initial principal and all accumulated interest from previous periods. This creates a snowball effect where your earnings generate their own earnings, leading to exponential growth over time. The more frequently interest compounds, the faster your money grows.

More frequent compounding generally results in higher returns. Daily compounding yields more than monthly, which yields more than annually. However, the difference between daily and monthly compounding is often minimal. The most important factors are your interest rate, time horizon, and consistent contributions.

The Rule of 72 is a simple way to estimate how long it takes for an investment to double. Divide 72 by your annual interest rate to get the approximate years needed. For example, at 8% interest, your money doubles in about 9 years (72 ÷ 8 = 9). This rule helps visualize the power of compound growth.

Both matter, but their impact depends on your time horizon. Over short periods, contributions have more impact. Over longer periods, the interest rate becomes increasingly important due to compounding. Ideally, maximize both by contributing as much as possible to investments with competitive returns while managing risk appropriately.

This calculator uses the standard compound interest formula and provides accurate mathematical projections based on your inputs. However, real-world investments may vary due to fluctuating interest rates, market conditions, fees, taxes, and inflation. Use these results as a planning tool rather than a guarantee of future returns.