Compound Interest Calculator
A compound interest calculator shows how money grows when interest is added on top of interest. Enter your starting amount, the annual rate, the number of years, and how often the interest compounds. The tool returns your final balance plus the boost compounding gives you over simple interest.
Last reviewed: May 14, 2026.
Final balance
$8,235.05
Total interest
$3,235.05
Compounding advantage
+$735.05
The compound interest formula
- A = final balance
- P = principal (starting amount)
- r = annual interest rate (decimal)
- n = number of times interest compounds per year
- t = time in years
More frequent compounding means more interest. Daily compounding earns slightly more than monthly, which earns more than annual. Most HYSAs use daily compounding. For full methodology, see our methodology page.
The Rule of 72
The Rule of 72 is a quick way to guess how long it takes money to double. Divide 72 by your APY. The answer is the number of years.
| APY | Years to Double | Where you find this |
|---|---|---|
| 1% | 72 years | Old savings account |
| 3% | 24 years | Bonds |
| 4.5% | 16 years | Top HYSA (May 2026) |
| 7% | 10.3 years | Long-term stock market average |
| 10% | 7.2 years | Aggressive growth investments |
The Rule of 72 is an estimate. For exact numbers, use the calculator above.
Frequently asked questions
What is compound interest in plain English?
Compound interest pays you interest on the interest you already earned. Year 1 you earn interest on the deposit. Year 2 you earn interest on the deposit plus year 1's interest. The total grows faster each year.
What is the Rule of 72?
The Rule of 72 estimates how long it takes money to double. Divide 72 by the APY. At 6% APY, money doubles in 12 years (72 / 6 = 12). At 4.5% APY, it doubles in 16 years. It is a quick mental shortcut, not exact.
What is the compound interest formula?
A = P(1 + r/n)^(nt). A is the final amount. P is the principal. r is the annual rate as a decimal. n is how many times interest compounds per year. t is the number of years.
Does daily compounding beat monthly?
Yes, but barely. A $10,000 deposit at 5% APY for 10 years: $16,470 with daily compounding vs $16,450 with monthly. The gap is about 0.12%. For most savings, the difference is too small to factor in.
How is APY different from APR?
APR is the simple annual rate. APY includes compounding. For a 5.00% APR compounded daily, APY = 5.13%. Banks advertise APY for savings accounts because it shows the real return after compounding.
Why does compound interest matter for retirement?
Over 30 to 40 years, compounding does most of the work. A $5,000 yearly contribution at 7% return grows to about $500,000 in 30 years. The longer the time horizon, the bigger the compound effect.