📈 Compound Interest Calculator

About this Compound Interest Calculator

Compound interest means you earn interest on your interest, so savings and investments grow faster over time. This calculator applies the standard compound interest formula with your choice of compounding frequency, from yearly to daily, and shows the final amount and the pure interest earned on top of your principal.

How to use it

1. Enter the principal amount you start with.
2. Enter the annual rate and the number of years.
3. Pick how often interest compounds and click Calculate.

Example

$10,000 at 8% per year, compounded monthly, for 5 years grows to $14,898.46, so the interest earned is $4,898.46.

Frequently asked questions

What is the compound interest formula?

A = P (1 + r/n) ^ (n x t), where P is the principal, r is the annual rate, n is the number of compounding periods per year and t is the time in years.

Does compounding frequency matter much?

Yes. The more often interest compounds, the slightly faster money grows. Daily compounding beats yearly compounding at the same rate, though the difference grows mainly over long periods.

How is this different from simple interest?

Simple interest is paid only on the original principal. Compound interest also pays interest on interest already earned, which is why growth accelerates.

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