Compound Interest Calculator - Project Your Investment Growth
Estimate the growth of your investments with our Compound Interest Calculator. Simple and accurate results.
| Year | Deposit | Interest | Ending Balance |
|---|---|---|---|
| 1 | $25,000.00 | $1,250.00 | $26,250.00 |
| 2 | $5,000.00 | $1,562.50 | $32,812.50 |
| 3 | $5,000.00 | $1,890.63 | $39,703.13 |
| 4 | $5,000.00 | $2,235.16 | $46,938.28 |
| 5 | $5,000.00 | $2,596.91 | $54,535.20 |
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See Also
Guide to Interest Calculations: Simple, Compound, and Rule of 72
Simple Interest
Simple interest is calculated only on the original principal. It does not compound over time.
Formula:
Simple interest is calculated only on the principal over time. Common in short-term lending.
Here's how simple interest works:
$100.00 × 10% = $10.00. After 1 year: $100.00 + $10.00 = $110.00.
Over 2 years at 10% per year: $100.00 + $10.00 + $10.00 = $120.00.
Compound Interest
Compound interest adds interest to the original amount and the accumulated interest.
Formula:
Compound interest includes accumulated interest over time. The more frequent the compounding, the more the return.
Here's how compound interest works:
$100.00 × 10% = $10.00 → $110.00. Then $110.00 × 10% = $11.00 → $121.00.
Over 2 years at 10% per year with compounding: $100.00 → $110.00 → $121.00.
Compound interest gives higher return than simple interest over time.
The Rule of 72
The Rule of 72 estimates the number of years to double your money based on interest rate.
Formula:
The Rule of 72 estimates how many years it takes to double your money at a given annual interest rate.
At an 8% interest rate: 72 ÷ 8 = 9 years to double your money.
Comparison to Loan Interest Methods
Simple and compound interest differ from amortized, deferred, and bond loan models:
- Amortized loans have equal periodic payments including interest and principal.
- Deferred loans accrue interest but are repaid later in full.
- Bonds are priced based on the present value of future payments.