Compound Interest Calculator
With your principal and interest rate, how much will it become in how many years? In how many years will it double?
When to use When you want to know the weight of the number of years by looking at deposit or loan interest rates.
Compound and simple interest
Compound interest is interest on interest. You multiply the principal by one plus the interest rate, raised to the power of the number of years. Simple interest is interest only on the principal. In an example from the U.S. Securities and Exchange Commission, if you deposit one hundred dollars at five percent per year, you will have one hundred and five dollars after one year, and one hundred and ten point two five dollars after two years.
The Rule of 72
Dividing seventy-two by the interest rate gives the approximate number of years it will take for the principal to double. At nine percent, it's eight years; at one percent, it's seventy-two years. This is a rule of thumb; the exact number of years is calculated using the compound interest formula.
It also works for borrowers
Compound interest also works on the interest of borrowed money. Check the interest rate for both deposits and loans.
Try with your own numbers
Change the values to recalculate instantly. The formula is provided below. For the source of the values, see the reference page.
Input value
Output value
Formula Balance with compound interest = Principal × (1 + Interest Rate ÷ 100) ^ Number of years. Balance with simple interest = Principal × (1 + Interest Rate ÷ 100 × Number of years). Approximate years to double = 72 ÷ Interest Rate
In other countries
The U.S. Securities and Exchange Commission teaches the same formula and the Rule of 72 in materials for classrooms. The Financial Services Agency calls the profit from reinvesting earnings into the principal "compound interest" and explains that its effect grows larger over longer periods. The formula does not change by country.
Source (Archive)
- What is compound interest? (Teachers, Classroom Resources)U.S. Securities and Exchange Commission, Investor.gov
- The basics of asset building (long-term, cumulative, and diversified investment).Financial Services Agency