Compound Interest Calculator
A compound interest calculator helps you calculate how your investments and savings grow over time through the power of compound interest. Use our free compound interest calculator to determine investment returns, savings accumulation, and the exponential growth of your money over time. This tool accounts for regular contributions, different compounding frequencies, and varying interest rates to show you exactly how compound interest works. Calculate your investment growth instantly to plan for retirement, education savings, or long-term wealth building.
Free • Investment planning • Compound growth
How Compound Interest Calculation Works
Compound Interest Formula
A = P(1 + r/n)^(nt)
A: Final amount after compound interest
P: Principal (initial investment)
r: Annual interest rate (decimal)
n: Number of times interest compounds per year
t: Time in years
Example Compound Interest Calculation
A $10,000 investment at 7% annual interest compounded monthly for 20 years grows to $40,977. Without compound interest (simple interest), it would only reach $24,000. The compound interest earned is $30,977.
This demonstrates the power of compound interest over long periods.
Benefits of Compound Interest
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and accumulated interest from previous periods, creating exponential growth over time.
How often should interest compound?
More frequent compounding (daily) yields higher returns than less frequent (annually). Most investments compound monthly or quarterly.
Why is compound interest important?
Compound interest is crucial for long-term wealth building, retirement planning, and understanding investment growth potential.
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