Compound Interest Calculator
Discover the power of exponential growth. Enter your figures below and see results instantly.
This tool is educational only. Not investment advice. Actual returns vary with markets, taxes, and fees.
Inputs
Results
Yearly Breakdown
| Year | Cumulative contributions | Cumulative interest | Balance |
|---|
Divide 72 by your annual return rate to estimate years to double your money. At 8% → ~9 years. At 12% → ~6 years.
How this calculator works
Compound interest is calculated on the initial principal plus all previously accumulated interest. Formula: A = P(1 + r/n)^(n·t) + PMT × [((1+r/n)^(n·t) − 1)/(r/n)]. Where A is final amount, P is principal, r is rate, n is compounding periods, t is years, PMT is periodic contribution.
Frequently asked questions
What is compound interest?
Interest calculated on the initial principal AND on the accumulated interest of previous periods — unlike simple interest, which is calculated on the principal alone.
Which compounding frequency is best?
The more frequent (daily vs annual), the slightly higher the result. The difference becomes noticeable over long periods or high rates.
Does this calculator include inflation?
No. Results are pre-inflation. For real returns, subtract ~2-3% from your annual return rate.
Does it account for taxes?
No. Check your local tax rules — tax-advantaged accounts (401k/IRA/Roth) differ substantially from taxable brokerage accounts.
Learn more about compounding
The TradeAlphaAI glossary explains compound interest and related concepts with examples and formulas.
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