What is compound interest?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns on the original amount, compound interest causes your money to grow exponentially over time — often called "interest on interest."

How does compounding frequency affect my returns?

More frequent compounding (e.g., monthly vs. yearly) means interest is calculated and added to your balance more often, so each subsequent calculation uses a slightly higher base. The difference is modest for typical rates but becomes more noticeable with higher rates or longer timeframes.

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 annual interest rate. For example, at 8% interest, it takes roughly 72 ÷ 8 = 9 years to double. It works best for rates between 4% and 12%.

Does this calculator account for taxes?

No — this shows the gross growth before taxes. In practice, interest or investment gains may be taxable depending on your account type (taxable brokerage, ISA, 401k, etc.) and jurisdiction. Consult a tax advisor for net-of-tax projections. The math here is the same compound-interest formula in every locale; it does not model the rules of any specific tax-advantaged account.

Is this accurate for stock market investments?

This calculator assumes a constant annual return, which is useful for projections but does not model real-world market volatility. Actual stock returns fluctuate year to year. Use the result as an estimate based on average historical returns, not a guarantee.

I want to project recurring monthly investing instead — what should I use?

Use the DCA Investment Calculator. This page is built around lump-sum growth (with optional monthly top-ups); the DCA calculator puts the monthly contribution at the center and is the right tool when consistent monthly investing — including SIPs — is the whole story.

FINFinancial

Compound Interest

Calculate how your savings or investments grow over time with compound interest. Supports monthly contributions and different compounding frequencies to help you plan for retirement, education, or any financial goal.

Currency

Initial Investment

Annual Interest Rate

Time Period

years

Compounding Frequency

Monthly Contribution(optional)

Try an example

Enter values above to see results

How It Works

Formula

A = P \left(1 + \frac{r}{n}\right)^{nt} + \text{PMT} \times \frac{\left(1 + \frac{r}{n}\right)^{nt} - 1}{r / n}

Where

$A$: Future value at the end of the period
$P$: Initial investment (principal)
$\text{PMT}$: Monthly contribution (converted to per-period inside the formula)
$r$: Annual interest rate (decimal)
$n$: Compounding periods per year (12 monthly, 4 quarterly, 1 yearly)
$t$: Time period in years

Enter your initial investment, expected annual return, time period, and compounding frequency. Optionally add a monthly contribution. The calculator applies the compound interest formula to your principal and adds the future value of your regular contributions to show the total growth.

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