Compound Interest Calculator
Calculate compound interest and the final amount on an investment or loan. Enter principal, annual rate, years, and compounding frequency. Compound interest grows faster than simple interest because interest earns interest.
Compound interest calculator
Result
What is this?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Over time, you earn interest on interest, so growth accelerates. Common in savings accounts, investments, and loans. The frequency of compounding matters: monthly compounding yields slightly more than annual compounding for the same rate. The calculator lets you set compounds per year (12 for monthly, 4 for quarterly, 1 for annual) so you can model real-world accounts accurately. Albert Einstein reportedly called compound interest the eighth wonder of the world.
When to use
Use to project investment growth, compare savings accounts, or understand loan costs. Example: $10,000 at 5% for 10 years (monthly compounding) grows to about $16,470. Essential for retirement planning. Investors compare different compounding frequencies. Borrowers understand how much they will repay. Parents project college savings. The power of compounding over decades is dramatic—starting early makes a huge difference. Run scenarios with different rates and terms to see the impact.
How to use
A = P(1 + r/n)^(nt). Enter principal, annual rate (%), years, and compounding frequency per year.
A = final amount, P = principal, r = rate, n = compounds/year, t = years
Frequently asked questions
- Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It grows faster than simple interest because you earn interest on interest.
- Common compounding frequencies are monthly (12x/year), quarterly (4x/year), or annually (1x/year). More frequent compounding yields slightly higher returns.