Compound Interest Calculator

Initial Investment:

Monthly Contribution (starting from second month):

Investment Period: Years Months

Interest Rate (%): Yearly Monthly

Compound Frequency: Annually Semiannually Quarterly Monthly Daily

Calculate

Summary

Detailed Breakdown

Period	Beginning Balance	Contribution	Interest Earned	Ending Balance

Note: Please be aware that there may be minor differences in the monthly interest earned due to variations in day-count conventions used in compound interest calculations. While some institutions use a 365-day year and actual days per month, others adopt a 360-day year with 30-day months (the 30/360 convention). This can lead to slight discrepancies when calculating interest, especially across different compounding frequencies like Annually, Semiannually, Quarterly, Monthly, and Daily. The calculator above adjusts for this by using a 360-day year and 30-day months in daily compounding scenarios. Adjustments may be necessary to align with specific financial standards or practices.

Do not underestimate the power of compounding in investment

Imagine planting a seed of a tree. At first, it grows slowly, but as it gets bigger, it starts growing faster because it has more branches and leaves. The same goes for your investment to grow, it earns more and more because you’re gaining interest on a larger sum each year. Although it takes several years for your money to double, your next wealth generation will become much faster. It’s worth investing early and letting the power of compounding do its magic.

How Long It Takes for Your Money to Double? Rule of 72

How long an investment will take to double with a specific rate of return? The Rule of 72 is a simple and quick way to estimate this. Follow these easy steps:

Step 1: Know Your Interest Rate/ Dividend Yield

Firstly, you need to know the annual interest rate or annual dividend yield for your investment. Make sure it’s expressed as a percentage (like 4%, 8%, etc.).

Step 2: Divide 72 by the Interest Rate/ Dividend Yield

Take the number 72 and divide it by your rate of return. For example, if your annual rate of return is 8%, divide 72 by 8. Your investment will double in 9 years.

Step 3: Understand the Power of Compounding

This rule works because of the compounding factor, which is the process of earning interest on both the money you invest and the interest that accumulates over time. You should not withdraw any interest earned or should reinvest any dividend received. As your investment grows, you start earning not just on your principal amount but also on the interest or dividend reinvested, causing your money to grow faster.