Compound Interest Calculator
Calculate how your investment grows with compound interest
The Compound Interest Calculator helps you visualize how your investment grows over time by calculating compound interest based on your initial amount, interest rate, compounding frequency, and investment period. Instantly see your final balance, total interest earned, and a year-by-year breakdown with detailed tables. This tool is ideal for savers, investors, students, and anyone planning their financial future. Please note: actual returns may vary due to taxes, fees, and inflation.
Investment period (years)
10 years
- Enter initial amount
Enter the initial amount in the 'Initial amount' field.
- Set interest rate
Enter the expected annual interest rate as a percentage.
- Choose period
Use the slider to select the investment period in years.
- Select frequency
Choose the compounding frequency (annual, monthly, etc.).
- Calculate results
Click the Calculate button to see the investment growth projection.
Tips and Tricks
- Compounding frequency
A higher compounding frequency usually leads to better returns.
- Considering inflation
Consider inflation when planning long-term investments.
FAQ
- What is compound interest?
- Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.
- How does compound interest work?
- Compound interest works by adding the interest earned to the principal amount, so that the interest earned in future periods is calculated on the new, larger principal.
- What is the formula for compound interest?
- The formula for compound interest is: A = P(1 + r/n)^(nt)
- What is the difference between simple and compound interest?
- Simple interest is calculated only on the initial principal, while compound interest is calculated on both the principal and the accumulated interest.
- What is the effect of compounding frequency on investment growth?
- Higher compounding frequency leads to faster growth, but the difference between daily and monthly compounding is minimal.
- How does inflation affect compound interest?
- Inflation reduces the purchasing power of money over time, so compound interest calculations should consider the expected inflation rate.
- How to calculate compound interest for free?
- You can calculate compound interest for free using our compound interest calculator.
- What is the rule of 7 in compound interest?
- The rule of 7 states that the interest rate multiplied by the number of years equals 7. This is a quick way to estimate the future value of an investment.