Compound Interest Calculator – Daily, Monthly & Yearly (2026)

What is compound interest?

Compound interest is interest earned on both your original money and on the interest it has already earned. Over long periods this snowball effect is powerful: at a 7% annual return, money roughly doubles every 10 years. Albert Einstein may never have called it "the eighth wonder of the world," but the math really does reward starting early.

The compound interest formula

For a single deposit: A = P × (1 + r/n)^n×t, where P is the principal, r the annual rate, n the number of compounding periods per year and t the number of years. This calculator also adds a monthly contribution at the end of each month and compounds it at the same rate, which is how most savings accounts and investment plans work.

Compounding frequency: does daily beat monthly?

More frequent compounding earns slightly more, but the difference is small. At 5%, monthly compounding gives an effective annual yield of 5.12% and daily compounding 5.13%. When comparing savings accounts, look at the APY (annual percentage yield), which already includes compounding.

The Rule of 72

To estimate how long it takes money to double, divide 72 by the annual rate: at 6% it takes about 12 years, at 9% about 8 years. It works in reverse for inflation, too — at 3.7% inflation, prices double in about 72 ÷ inflation rate years.

Why the inflation-adjusted value matters

A million dollars in 30 years will not buy what a million buys today. The calculator shows your result in today's dollars using an inflation rate you can change; it is pre-filled with the latest U.S. consumer price inflation (3.7%), updated automatically from the Bureau of Labor Statistics.

Where can I earn compound interest?

High-yield savings accounts and CDs — low risk, FDIC (U.S.) or CDIC (Canada) insured up to limits.
Bonds and Treasury securities — fixed income with modest risk.
Stock index funds — historically higher long-term returns but with ups and downs; returns are not guaranteed.
Tax-advantaged accounts such as a 401(k), IRA, RRSP or TFSA let compounding work without yearly taxes on gains.

Frequently asked questions

How much will $10,000 grow in 20 years?

At 7% compounded monthly with no extra contributions, $10,000 grows to about $40,400 in 20 years. Adding $500 a month brings it to roughly $300,000. Use the calculator above for your own numbers.

What is the difference between APR and APY?

APR is the simple annual rate without compounding; APY includes the effect of compounding. APY is the better number for comparing savings accounts.

Is a 7% return realistic?

Broad U.S. stock indexes have historically returned around 10% per year before inflation over long periods, but with large swings. Many planners use 5%–7% to be conservative. Savings accounts pay much less.

How often is interest compounded on savings accounts?

Most banks compound daily and pay interest monthly. The APY they advertise already reflects that.

Sources & methodology

This calculator was last reviewed on November 1, 2026. Figures are based on the following official and primary sources:

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Compound Interest Calculator with Monthly Contributions