Compound Interest Calculator
Calculate investment returns and predict future assets
Loading…
How to use the compound interest calculator
Enter the initial investment amount
Type the amount you plan to invest first, numbers only without commas.
Set the annual interest rate
Enter the expected annual return as a percentage (%). Example: 5.5
Set the investment period
Enter the total period you will invest, in years.
Set additional contributions (optional)
Enter the amount you will contribute on a regular basis. Leave 0 if none.
Choose the contribution frequency
Select whether additional contributions are monthly or yearly.
Calculate
Click the “Calculate” button to see the result.
Examples of the power of compounding
Below are real-world cases that illustrate the amazing power of compound interest. Even with the same initial investment, the final amount can differ greatly depending on return rate and investment period.
| Initial investment | Annual return | Investment period | Final amount | Total profit |
|---|---|---|---|---|
| $100,000 | 5% | 10 years | $162,800 | $62,800 |
| $100,000 | 10% | 20 years | $672,700 | $572,700 |
| $100,000 | 7% | 30 years | $761,200 | $661,200 |
The amazing power of compounding
As you can see in the examples above, even with the same 1 million$ the final amount varies greatly depending on the investment period and return rate. Note especially that the compounding effect grows exponentially the longer you invest.
In a 30-year long-term investment, assets increased to more than 7.6 times the initial amount. This can also be explained by the “Rule of 72”: divide 72 by the annual return rate to estimate how many years it takes to double your money. For example, at 7% per year, your money doubles roughly every 10.3 years.
※ The figures above are simple calculations that do not factor in taxes or fees. Actual investment results may differ due to various factors.
Frequently Asked Questions
What is compound interest?
Compound interest is a calculation method in which interest is earned not only on the principal but also on interest previously earned. Because asset growth accelerates over time, it is often called “the magic of compounding.”
What is the difference between simple and compound interest?
With simple interest, interest is applied only to the principal, while with compound interest, interest is applied to the principal plus any accumulated interest. Over the long term, compound interest has a much greater effect.
How accurate are the results of this calculator?
The calculator provides mathematically accurate results, but in real investments taxes, fees and market volatility can affect the outcome. Use the results for reference only.
Which investments use compound interest?
Most financial products use compound interest. Savings accounts, term deposits, bonds, stocks, funds and real estate can all benefit from compounding in long-term investing.
Why compound interest matters
Compound interest is one of the most powerful ways to grow wealth over the long term. Albert Einstein reportedly called it "the most powerful force in the universe."
Key advantages of compounding
- Asset growth accelerates over time.
- The longer you stay invested, the greater the effect.
- The earlier you start, the bigger the benefit.
- You can start with a small amount.
To understand how much timing matters, imagine one person who starts investing $300 per month at age 25 and another who starts at 35. With an average annual return of 7 % and contributions until age 60, the 25-year starter will end up with roughly twice as much wealth as the 35-year starter. That’s the “magic of time” — the power of compound interest.