Compound interest is interest earned on both your original deposit and previously earned interest. Use Monegrow's free compound interest calculator to see how your savings grow over time by entering your principal, rate, and time period.
Compound Interest Calculator
See how your money grows over time with the power of compound interest. Adjust the inputs below to visualize your wealth trajectory.
Inputs
Growth Over Time
Year-by-Year Breakdown
| Year | Contributions | Interest | Total Value |
|---|---|---|---|
| 2 | $14,800 | $1,834 | $16,634 |
| 4 | $19,600 | $4,662 | $24,262 |
| 6 | $24,400 | $8,633 | $33,033 |
| 8 | $29,200 | $13,918 | $43,118 |
| 10 | $34,000 | $20,714 | $54,714 |
| 12 | $38,800 | $29,246 | $68,046 |
| 14 | $43,600 | $39,776 | $83,376 |
| 16 | $48,400 | $52,603 | $101,003 |
| 18 | $53,200 | $68,070 | $121,270 |
| 20 | $58,000 | $86,573 | $144,573 |
What Is Compound Interest?
Compound interest is the interest calculated on both the initial principal and the accumulated interest from previous periods. Often called "interest on interest," it is one of the most powerful concepts in personal finance and the primary driver of long-term wealth creation.
The Compound Interest Formula
A = P(1 + r/n)nt
Where: A = future value, P = principal, r = annual rate, n = compounds per year, t = years
The key insight is that compound interest grows exponentially, not linearly. The longer your money stays invested, the more dramatic the growth becomes. This is why financial advisors emphasize starting to invest early — even small amounts can grow into substantial sums given enough time.
Key Takeaways
- Time is the most powerful variable in compound interest — starting 10 years earlier can double your final balance.
- Higher compounding frequency (monthly vs. annually) increases returns, though the difference diminishes at higher frequencies.
- Regular monthly contributions dramatically accelerate wealth building through dollar-cost averaging.