Compound Interest Calculator

Calculate how your money grows with compound interest

💰 Investment Details

Principal Amount ($)

Annual Interest Rate (%)

Time Period (years)

Compounding Frequency

📈 Growth Projection

Compound Interest FAQ

Get answers to common questions about compound interest calculator

🧮Formula

A = P(1 + r/n)^(nt)

💡How it works

A = final amount, P = principal, r = annual interest rate, n = compounding frequency per year, t = time in years. Compound interest grows exponentially over time.

ℹ️ What is Compound Interest Calculator?

A compound interest calculator shows how money grows when interest is earned on both the principal and previously accumulated interest. It is the foundation of long-term investing, retirement planning, and understanding the true cost of debt.

📐 Formula

A = P × (1 + r/n)^(n×t)

A— Final amount (principal + interest)

P— Principal — initial amount invested/borrowed

r— Annual interest rate (as decimal)

n— Number of times interest compounds per year

t— Time in years

✏️ Worked Example

Principal: $5,000

Annual Rate: 8%

Compounding: Monthly (n=12)

Time: 10 years

1r = 0.08, n = 12, t = 10
2A = 5000 × (1 + 0.08/12)^(12×10)
3A = 5000 × (1.006667)^120
4A = 5000 × 2.2196 ≈ $11,098
5Total interest = $11,098 − $5,000 = $6,098

✅ Result: Final Amount = $11,098 | Compound Interest = $6,098

💡 How to Interpret Results

▸More frequent compounding (daily > monthly > annually) yields slightly more, though the difference narrows at the same APR.
▸The Rule of 72: divide 72 by the annual rate to estimate years to double. At 8%: 9 years.
▸Compound interest works against you in debt: a credit card at 24% APR, paid minimums only, can balloon principal dramatically.
▸Starting 10 years earlier can more than double your final balance — time is the most important variable.
▸Always compare APY (not APR) across savings accounts — APY already reflects compounding frequency.