Compound Interest Calculator

Introduction

The compound interest calculator estimates how an investment or deposit grows when interest is added to the balance and itself earns interest over time.

Disclaimer: This tool is for informational purposes only and is not professional medical, financial, or tax advice.

Formula

Compound interest grows a principal by applying the periodic rate for each compounding period over the investment horizon.

• A — Future value (amount)
• P — Principal (starting amount)
• r — Annual nominal interest rate (decimal)
• n — Number of compounding periods per year
• t — Time in years

Step-by-step

1. Enter the starting principal.
2. Enter the annual interest rate as a percent.
3. Enter how many years the money will compound.
4. Enter compounding frequency (e.g. 12 for monthly).
5. Apply A = P(1 + r/n)^(nt) to get the future value.

Worked example

For $10,000 at 6% compounded monthly for 5 years: monthly rate is 0.5%, there are 60 periods, and the future value is about $13,488.50.

Use cases

• Project savings growth for a fixed annual rate
• Compare monthly vs quarterly compounding
• Estimate interest earned on a lump-sum deposit

Frequently asked questions