Compound Interest Calculator

Calculate the future value of an investment with compound interest. See how your money grows over time.

Calculate Compound Interest

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What is Compound Interest?

Compound interest is the interest you earn on both your original principal and the interest you've already earned. This is sometimes called "interest on interest" and is a powerful force for growing your money over time.

The Power of Compounding

The compound interest formula is:

A = P × (1 + r/n)^(n×t)

Where:

  • A = Future value
  • P = Principal amount
  • r = Annual interest rate (decimal)
  • n = Compounding frequency per year
  • t = Time in years

Compounding Frequencies

  • Annually: Interest compounded once per year
  • Semi-annually: Twice per year
  • Quarterly: Four times per year
  • Monthly: Twelve times per year (most common)
  • Daily: 365 times per year

Example

Invest $10,000 at 5% annual interest, compounded monthly, for 10 years:

A = $10,000 × (1 + 0.05/12)^(12×10)
A = $10,000 × (1.004167)^120
A = $16,289.00

The investment grows by $6,289 through the power of compounding!

💡 Tip: The more frequently interest is compounded, the faster your money grows. Even small differences in compounding frequency can have a significant impact over time.