Compound Interest Calculator
Calculate compound interest with monthly contributions, step-up increases, inflation adjustment, tax impact, and multiple compounding frequencies.
Configure Investment
A = P × (1 + r/n)n×t + contributions compounded monthly | r = annual rate, n = compounding freq, t = years
🔍 Compounding Frequency Comparison
| Frequency | Maturity | Interest | Extra vs Yearly |
|---|
📅 Year-by-Year Breakdown
| Year | Opening Bal. | Contributions | Interest | Closing Bal. |
|---|
⚡ Power of Compounding
Key insights that demonstrate why compound interest is the 8th wonder of the world
Understanding Compound Interest
What is Compound Interest?
Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods. Unlike simple interest, your money grows exponentially as you earn “interest on interest.” This snowball effect makes it one of the most powerful forces in finance and wealth building.
Rule of 72
The Rule of 72 is a quick way to estimate how long it takes for an investment to double. Simply divide 72 by the annual interest rate. At 8% p.a., your money doubles in approximately 9 years. At 12%, it takes only 6 years. This rule helps you quickly gauge the power of different return rates.
Compounding Frequency Matters
More frequent compounding means faster growth. Monthly compounding earns more than yearly compounding at the same annual rate, because interest is calculated and added to the principal more often. The difference grows significantly over longer time periods and with larger amounts.