Published on July 05, 2026 • Last updated July 05, 2026
Final maturity amount (principal + interest)
Initial principal investment or deposit amount
Annual nominal interest rate (as a decimal)
Number of compounding periods per year
Time period the money is invested for in years
Compound interest is the interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods. Unlike simple interest, compound interest allows your money to grow exponentially because you earn interest on interest.
The Rule of 72 is a quick way to estimate how long it will take to double your money with compound interest. Divide 72 by your annual interest rate to get the approximate number of years (e.g., at 8% return, money doubles in 72/8 = 9 years).
The more frequently interest is compounded, the higher the final return. Compounding monthly yields more than compounding quarterly, which yields more than compounding annually.
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