Compound Interest Calculator

Our free Compound Interest Calculator lets you calculate the final amount of an investment or loan with compounding. Enter the principal, annual interest rate, time period, and compounding frequency to see how your money grows.

What is Compound Interest?

Compound interest is the interest on a principal amount plus the accumulated interest from previous periods. It is the foundation of long-term investment growth and is often called "interest on interest". The more frequently interest compounds, the faster your investment grows.

Compound Interest Formula

The formula for compound interest is:

A = P × (1 + r/n)^(n×t)

• A = Final amount (principal + interest)
• P = Principal (initial investment)
• r = Annual interest rate (decimal)
• n = Number of times interest compounds per year
• t = Time in years

Example

Invest $1,00,000 at 10% annual interest compounded monthly (n=12) for 5 years:
A = 1,00,000 × (1 + 0.10/12)^(12×5) = $1,64,534

Frequently Asked Questions

What compounding frequency should I choose?

Monthly (12) is most common for savings accounts. Annually (1) is common for bonds and fixed deposits. Daily (365) gives the maximum return.

What is the difference between simple and compound interest?

Simple interest is calculated only on principal. Compound interest is calculated on principal plus accumulated interest, leading to exponential growth.

Is this calculator free?

Yes, this compound interest calculator is completely free to use with no registration required.