Calculate simple, compound, and continuous interest on savings and investments. Compare different compounding frequencies and see your money grow.
Final Amount
$16,470
After 10 years
Total Interest
$6,470
64.7% of principal
A = P(1 + r/n)^(nt)
A = $10,000 × (1 + 0.0500/12)^(12 × 10) = $16,470
P = Principal, r = Annual rate (decimal), t = Time (years), n = Compounds per year
| Interest Type | Interest Earned | Final Amount | Difference |
|---|---|---|---|
| Simple | $5,000 | $15,000 | - |
| Compound (Monthly) | $6,470 | $16,470 | +$1,470 |
| Continuous | $6,487 | $16,487 | +$1,487 |
| Year | Starting Balance | Interest | Ending Balance |
|---|---|---|---|
| Year 1 | $10,000 | +$512 | $10,512 |
| Year 2 | $10,512 | +$538 | $11,049 |
| Year 3 | $11,049 | +$565 | $11,615 |
| Year 4 | $11,615 | +$594 | $12,209 |
| Year 5 | $12,209 | +$625 | $12,834 |
| Year 6 | $12,834 | +$657 | $13,490 |
| Year 7 | $13,490 | +$690 | $14,180 |
| Year 8 | $14,180 | +$725 | $14,906 |
| Year 9 | $14,906 | +$763 | $15,668 |
| Year 10 | $15,668 | +$802 | $16,470 |
At 5% interest, your money will double in approximately:
14.4 years
Formula: 72 ÷ 5 = 14.4 years
Quick Reference:
3% → 24 years
4% → 18 years
5% → 14.4 years
6% → 12 years
8% → 9 years
10% → 7.2 years
See how time dramatically affects compound interest
1 insight based on your inputs
Starting early matters more than the interest rate. $10K at 7% for 40 years = $150K. Same for 20 years = $39K. That extra 20 years adds $111K!
Explore other tools that might help
An interest calculator computes how much interest you will earn (on savings) or pay (on loans) over time. Choose simple interest (I = PRT, on principal only) or compound interest (on principal plus accumulated interest). Our calculator at practicalwebtools.com shows both calculations for easy comparison.
Simple interest is calculated only on the principal: I = P × r × t. Compound interest is calculated on principal plus accumulated interest: A = P(1 + r/n)^(nt). Compound interest grows faster because "interest earns interest." Over time, the difference becomes dramatic.
Continuous compounding is the theoretical limit of compound interest where interest compounds infinitely often. The formula is A = Pe^(rt). While no bank offers truly continuous compounding, some use daily compounding which is very close. It results in slightly more interest than daily compounding.
The Rule of 72 estimates how long it takes to double money at a given interest rate: Years to double ≈ 72 ÷ Interest Rate. At 8% interest, money doubles in about 9 years (72 ÷ 8). This is a quick mental math tool for compound interest.
APR (Annual Percentage Rate) is the simple interest rate without compounding. APY (Annual Percentage Yield) includes the effect of compounding. APY is always equal to or higher than APR. Banks advertise APY on savings (to attract depositors) and APR on loans (to appear lower).
More frequent compounding means more interest earned. Daily compounding earns more than monthly, which earns more than annually. However, the difference between daily and continuous is minimal. For savings, look for the highest APY regardless of compounding frequency.
Final Amount
$16,470
After 10 years
Total Interest
$6,470
64.7% of principal