Compound Interest Calculator

How to Use

1. Enter the principal (starting amount), annual interest rate, and number of years.
2. Choose how often interest compounds (annually, quarterly, monthly, or daily).
3. The final amount and total interest earned are calculated instantly.

Calculation Method

Compound interest is calculated as A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate, n is the number of compounding periods per year, and t is the time in years. Unlike simple interest, compound interest is earned on both the principal and previously accumulated interest, so more frequent compounding (e.g. daily vs. annually) produces a slightly higher return at the same nominal rate.

Common Uses

• Estimating how a lump-sum investment or deposit will grow over time.
• Comparing the effect of different compounding frequencies on returns.
• Understanding the long-term impact of interest rate differences.