Compound Interest Calculator
Use our **compound interest calculator** to grow your savings and estimate future value.
Investment Details
Enter your investment details to see how your money can grow with the power of compounding.
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How to Use the Compound Interest Calculator
Our **compound interest calculator** makes it simple to understand the growth potential of your investments. Just follow these steps:
- **Enter your initial amount** (principal) and the annual interest rate.
- **Specify the investment duration** in years and how often the interest compounds.
- **Optionally add a recurring contribution** to see its long-term impact.
- Click "Calculate" to view the growth curve, a detailed breakdown, and a yearly table.
Formula Breakdown
The calculator uses the core **compound interest formula** and a formula for recurring contributions to give you an accurate estimate.
$A = P \times \left(1 + \frac{r}{n}\right)^{n t}$
This is for principal growth only, where:
- $A$ = Future Value
- $P$ = Principal
- $r$ = Annual Rate (decimal)
- $n$ = Compounding periods per year
- $t$ = Years
$A_{\text{total}} = P \times \left(1 + \frac{r}{n}\right)^{n t} + C \times \left(\frac{(1 + \frac{r}{n})^{n t} - 1}{\frac{r}{n}}\right)$
This formula includes recurring contributions ($C$).
Frequently Asked Questions (FAQs)
What is compound interest?
**Compound interest** is the interest calculated on the initial principal as well as on all the accumulated interest from previous periods. This causes your investment to grow exponentially over time, especially over long durations.
How often should interest compound?
The more frequently interest compounds, the faster your investment grows. While annual compounding is a good starting point, more frequent options like monthly or daily compounding will yield slightly higher returns.
Can I include monthly contributions?
Yes, our **compound interest calculator with contributions** allows you to add regular deposits to see their massive impact on your long-term wealth. Even small, consistent contributions can make a big difference.
How many years will it take to double my money?
A quick way to estimate this is by using the **Rule of 72**. Divide 72 by your annual interest rate to get an approximate number of years it will take for your investment to double.
Is compound interest always a good thing?
For investors and savers, yes, compound interest is a powerful tool. However, for those with debt (like high-interest credit cards), it can work against you, as interest on debt also compounds rapidly.