This compound interest calculator shows how an investment grows as interest earns interest over time. Enter the principal, annual rate, compounding frequency, and years above.
Formula
A = P × (1 + r ÷ n)^(n × t)
- P — principal, r — annual rate, n — compounds per year, t — years
Example
$10,000 at 5%, compounded monthly, 10 years: A = 10,000 × (1 + 0.05/12)¹²⁰ = $16,470.
Why compounding matters
More frequent compounding and more time both increase the final amount, because each period’s interest joins the balance and earns more.
Good to know
These results are estimates for educational purposes only and are not financial advice. Rates, fees, and terms vary by lender and situation — confirm figures with a licensed professional before making decisions. Last updated: August 2026.
Frequently Asked Questions
How do I calculate compound interest?
Use A = P (1 + r/n)^(nt), where n is the number of times interest compounds per year and t is the number of years.
What is the difference between simple and compound interest?
Simple interest is earned only on the principal; compound interest is earned on the principal plus previously accrued interest.
Does compounding frequency matter?
Yes. Compounding monthly or daily grows a balance slightly faster than annually at the same rate.