Compound Interest (Total Amount) Calculator

Compound Interest (Total Amount) is means interest that accrues on the initial investment and the interest earned in the previous month or year — in other words, interest on interest. For example, with a bank deposit, interest accrues on the deposit in the first year. The next year, interest accrues on the deposit plus the previous year's interest. The year after, it accrues again on the deposit plus all interest received over the previous two years. As a result, the balance grows every year, and its growth rate can be higher than with simple interest.

Compound Interest (Total Amount) Calculation Method

r: interest rate, R: effective rate, k: compounding periods per year

Result

About This Calculator

Compound interest is interest earned on both the original principal and on the interest already credited to the account. Because each period adds to the balance that the next period earns on, growth accelerates over time — the effect Albert Einstein reportedly called the eighth wonder of the world.

Use this calculator to see how a lump sum grows at a fixed annual rate with daily, monthly, quarterly, semi-annual or annual compounding, and to compare the total interest with the simple-interest alternative.

Compounding turns a linear return into an exponential one: 1,000 at 5 % for 10 years ends at 1,629 compounded annually, 1,647 compounded monthly and 1,648 with continuous compounding. The short-cut rule of 72 — divide 72 by the percentage rate — predicts the doubling time within a few percent for rates between 5 % and 12 %.

Key Formula:A = P × (1 + r / n)^(n × t)

Frequently Asked Questions

What is the difference between simple and compound interest?

Simple interest is always calculated on the original principal only, so it grows in a straight line. Compound interest is calculated on principal plus previously earned interest, so it grows exponentially. Over long periods the gap between the two becomes very large.

Does more frequent compounding always earn more?

Yes, at the same quoted annual rate, more frequent compounding produces a higher effective yield: daily beats monthly, which beats annual. The difference is small at low rates but grows with the rate and the term.

What is the rule of 72?

The rule of 72 is a quick mental shortcut: divide 72 by the annual interest rate to estimate the years needed to double your money. At 6% a year, money roughly doubles in 72 ÷ 6 = 12 years.

How do I compare two compounding frequencies fairly?

Convert both to the effective annual rate: (1 + r/n)^n − 1. A nominal 5 % compounded monthly is 5.12 % effective, and daily compounding of the same nominal rate is 5.13 %. Only the effective rate is comparable.

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Sources & last update

2026-10-19