Compound Interest Calculator
Calculate compound interest on investments and savings over time
About This Calculator
The Compound Interest Calculator calculates how your investments grow over time with compound interest. Unlike simple interest, compound interest earns interest on both the principal and previously earned interest, resulting in exponential growth.
How It Works
- 1
Enter your initial principal amount (starting investment).
- 2
Input the annual interest rate as a percentage.
- 3
Specify the time period in years.
- 4
Select the compounding frequency (how often interest is calculated and added).
- 5
The calculator computes the total amount and interest earned using compound interest formula.
Formula Explanation
A = P(1 + r/n)^(nt)Where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the time in years. This formula shows how money grows exponentially with compound interest.
Tips
More frequent compounding (daily vs. annually) results in higher returns.
Start investing early - time is the most powerful factor in compound interest.
Even small regular contributions can significantly boost your final amount.
Higher interest rates dramatically increase growth over long periods.
Consider tax implications when calculating investment returns.
Common Uses
Investment Planning
Project how your investments will grow over time with compound interest.
Savings Goals
Calculate how much you need to invest to reach your savings goals.
Retirement Planning
Estimate retirement savings growth with compound interest.
Loan Interest
Understand how compound interest affects the total cost of loans.