Calculate compound interest on savings or investments with monthly contributions and yearly, quarterly, monthly or daily compounding.
Compound interest is interest on interest: each period's interest is added to the balance and earns interest itself.
More frequent compounding gives a slightly higher effective annual rate: 5% compounded monthly is 5.12% a year.
Compounded yearly, about $16,289. Compounded monthly, about $16,470.
Divide 72 by the interest rate to estimate how many years it takes to double: about 10 years at 7%.