Compounding Calculator

Compound interest is interest earned not just on your original principal, but on the interest that principal has already earned - which is what makes long-term growth curves bend upward rather than climb in a straight line. This calculator applies that effect to a principal amount, rate of return, tenure and compounding frequency you specify.

Run the same principal and rate at different tenures and you'll notice the value added in the final few years is often larger than everything earned in all the earlier years combined - compounding's gains are heavily back-loaded, which is also why interrupting a long-term investment early gives up disproportionately more than the calendar time lost would suggest.

Compounding frequency (annual, monthly, and so on) also has a real, if smaller, effect - more frequent compounding at the same nominal rate produces a marginally higher effective return. But the two variables that matter far more than frequency are the ones many investors underrate: how early you start, and how consistently you stay invested without interruption.