Compound Interest Calculator
Calculate compound interest on savings and investments. See how your money grows over time with different compounding frequencies.
Final Amount
$1,647.01
Total Interest Earned
$647.01
How It Works
This calculator uses the standard compound interest formula:
A = P(1 + r/n)nt
- P — Principal (initial investment)
- r — Annual interest rate (decimal)
- n — Number of compounding periods per year
- t — Time in years
- A — Final amount after interest
The total interest earned is simply A − P.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns interest on the original amount, compound interest allows your money to grow faster because you earn "interest on interest."
How does compounding frequency affect my returns?
The more frequently interest is compounded, the more you earn. Daily compounding yields slightly more than monthly, which yields more than quarterly, and so on. However, the difference between daily and monthly compounding is usually small for typical interest rates.
What is the compound interest formula?
The formula is 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 number of years.