Interest Calculator
Calculate simple and compound interest. Add regular contributions. Compare rates side-by-side.
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The Eighth Wonder of the World
Albert Einstein reportedly called compound interest "the eighth wonder of the world." Whether he actually said it or not, the math doesn't lie—compound interest is the most powerful wealth-building force available.
Our Interest Calculator shows you exactly how your money grows over time, with 7 compounding frequencies, regular contributions, and the ability to compare different interest rates side-by-side.
Three Calculation Modes
1. Basic Interest
Calculate the future value of a lump sum investment with any compounding frequency—from simple interest to continuous compounding.
2. With Contributions
Add regular monthly or annual contributions to your initial investment. See how systematic investing accelerates wealth building.
3. Compare Rates
See how small differences in interest rates create massive differences over time. Compare 3 rates simultaneously.
All Features
The Formulas
Simple Interest
Interest calculated only on principal. Linear growth.
Compound Interest
Interest on interest. Exponential growth.
Frequently Asked Questions
What is compound interest?
Compound interest is 'interest on interest.' Your earnings are added to your principal, and future interest is calculated on the new, larger amount. Over time, this creates exponential growth—the longer you invest, the faster it grows.
What is the compound interest formula?
A = P(1 + r/n)^(nt), where A = final amount, P = principal, r = annual rate (decimal), n = compounding frequency per year, t = time in years. For continuous compounding: A = Pe^(rt).
What is simple interest?
Simple interest is calculated only on the original principal: I = P × r × t. Unlike compound interest, earned interest isn't added to the principal. Simple interest results in linear (not exponential) growth.
Does compounding frequency matter?
Yes, more frequent compounding = slightly higher returns. Daily compounding earns more than monthly, which earns more than annually. However, the difference is usually small (e.g., 5% annually vs 5% daily over 10 years: about 0.5% difference in total return).
What is the Rule of 72?
The Rule of 72 estimates how long it takes to double your money: Years to double ≈ 72 ÷ interest rate. At 6% interest, money doubles in ~12 years. At 12% interest, it doubles in ~6 years. Our calculator shows exact doubling time.
How do regular contributions affect growth?
Regular contributions dramatically accelerate wealth building. Adding $200/month to a $10,000 investment at 7% for 20 years grows to ~$143,000 vs ~$39,000 without contributions. Use our 'With Contributions' mode to see the impact.
What is Effective Annual Rate (EAR)?
EAR is the actual annual rate after accounting for compounding. A 5% rate compounded monthly = 5.12% EAR. This lets you compare rates with different compounding frequencies on equal terms.
What is continuous compounding?
Continuous compounding is the mathematical limit of compounding infinitely often. It uses the formula A = Pe^(rt). It's mostly theoretical—used in finance for pricing options and bonds—but represents the maximum possible growth for a given rate.
How does a 1% higher interest rate affect my investment?
Over long periods, small differences compound dramatically. $10,000 at 5% for 30 years = $43,219. At 6% = $57,435. At 7% = $76,123. That extra 2% (5% vs 7%) means $33,000 more. Use our Compare Rates mode to visualize this.
Is compound interest good for savings and bad for debt?
Exactly. Compound interest works FOR you with savings/investments and AGAINST you with debt. Credit card debt at 20% compounds rapidly. This is why paying off high-interest debt is often the best 'investment' you can make.