Compound Interest Calculator
Calculate compound interest with custom compounding frequency. See how your investment grows over time with the power of compounding.
How to Calculate Compound Interest
Where: A = Final amount, P = Principal, r = Annual rate (decimal), n = Compounds per year, t = Time in years.
Total Interest = A − P
P = $10,000, Rate = 6%, Time = 10 years, Compounded Monthly (n=12)
A = $10,000 × (1 + 0.06/12)12×10
A = $10,000 × (1.005)120 = $18,193.97
Interest = $18,193.97 − $10,000 = $8,193.97
The Power of Compounding
More frequent compounding leads to higher returns. Daily compounding earns slightly more than monthly, which earns more than annually. The difference grows with higher rates and longer time periods.
Rule of 72
A quick estimate: divide 72 by your interest rate to find how many years it takes to double your money. At 6%, your money doubles in approximately 72/6 = 12 years.
FAQ
What's the difference between APR and APY?
APR (Annual Percentage Rate) doesn't account for compounding. APY (Annual Percentage Yield) does. With monthly compounding, a 6% APR gives an APY of about 6.17%.
How does compounding frequency affect results?
More frequent compounding increases returns because interest earns interest sooner. However, the difference between daily and monthly compounding is typically small.
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Last updated: 2026-08-08