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Compound Interest Calculator

Enter principal and annual rate to see compound interest by year

💡 Compound Interest Tips

  • Formula: A = P × (1 + r/n)^(n×t) — P: principal, r: annual rate, n: compounding periods/year, t: years
  • Monthly compounding yields slightly higher returns than annual compounding
  • The power of compounding grows dramatically over long time horizons
  • This calculator excludes tax (15.4% interest income tax)

Frequently Asked Questions

What is the difference between compound and simple interest?

Simple interest applies only to the principal, while compound interest applies to both principal and accumulated interest. The longer the period, the more dramatic the difference — e.g., 5% annual compound rate over 30 years turns 1x into ~4.3x.

Is monthly compounding always better than annual?

For the same nominal rate, more frequent compounding yields slightly higher effective returns. However, the difference is small — focus on comparing the nominal rate and terms of each product first.

What is the Rule of 72?

Years to double = 72 ÷ annual rate (%). Example: at 6% annual compound rate, 72÷6=12 years to double your money.