Principal & Rate
Time & Interest Type
Interest Formula
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
Growth Over Time
Interest Type Comparison
| 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 |
Yearly Schedule
| 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 |
Rule of 72
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
What if I invested for longer?
See how time dramatically affects compound interest
Personalized Insights
1 insight based on your inputs
Time is Your Ally
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!
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Frequently Asked Questions
What is the difference between simple and compound interest?
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.
What is continuous compounding?
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.
What is the Rule of 72?
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.
What is APY vs APR?
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).
How often should interest compound?
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.
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).