Compound Interest Calculator
See how a lump sum grows when interest compounds. Enter your starting principal, an annual rate, the number of years and how often interest is added to get the final balance and total interest earned.
How to use the compound interest calculator
- Enter your starting principal and the annual interest rate.
- Choose the number of years and the compounding frequency.
- Review the final amount, total interest and the yearly growth table.
Examples
10,000 at 8% for 10 years, compounded monthly
principal 10000, rate 8%, 10 years, monthly
Final amount 22,196.40 with 12,196.40 in interest
Frequently asked questions
What is compound interest?
Compound interest is interest earned on both your original principal and on the interest already added. Because each period builds on the last, the balance grows faster over time than with simple interest.
What is the compound interest formula?
The final amount is A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year and t is the number of years. Interest earned is A minus P.
How does compounding frequency change the result?
The more often interest is added, the more you earn, because new interest starts compounding sooner. For the same rate and term, daily compounding beats monthly, which beats quarterly and annual.
How is compound interest different from simple interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus accumulated interest, so the balance grows faster the longer you stay invested.
Does this account for taxes, fees or inflation?
No. The result is a nominal projection before taxes, account fees and inflation. Treat it as an estimate of growth at the rate you enter.
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