Compound Interest Calculator

Our compound interest calculator helps you determine how your investments grow over time when interest is reinvested. Unlike simple interest, compound interest calculates interest on both the initial principal and accumulated interest from previous periods.

What is Compound Interest?

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. It's often called "interest on interest" and can significantly increase investment returns over time.

The Compound Interest Formula

The formula for compound interest is: A = P(1 + r/n)^(nt)

• A = Final amount
• P = Principal (initial investment)
• r = Annual interest rate (decimal)
• n = Number of times interest compounds per year
• t = Time in years

Applications

• Savings accounts and certificates of deposit (CDs)
• Investment portfolio growth projections
• Retirement planning and 401(k) calculations
• Student loan and mortgage interest calculations
• Bond investments and treasury securities

Example

If you invest $10,000 at 5% annual interest compounded monthly for 10 years: A = $10,000 × (1 + 0.05/12)^(12×10) = $16,470.09 You'll earn $6,470.09 in compound interest.