Compound Interest Calculator
Calculate future value with compounding frequency and see total interest earned.
How compound interest is calculated
Compound interest is interest that earns interest. Each period the balance grows, and the next period's interest is charged on that larger balance — which is why the curve bends upward instead of running in a straight line. This compound interest calculator lets you set the compounding frequency yourself, from yearly all the way down to daily, so you can see exactly how much difference monthly versus annual compounding makes on the same deposit.
How to use the Compound Interest Calculator
- Enter your starting Principal (P).
- Type the Annual Rate (r%) your account or investment pays.
- Set Time (years).
- Choose Compounds / year — yearly, half-yearly, quarterly, monthly or daily — and compare the totals.
Formula and a worked example
A = P(1 + r/n)n·t
P is the principal, r the annual rate as a decimal, n how many times a year interest is added, and t the number of years. Interest earned is simply A − P. Raising n raises the result, but with diminishing returns — the jump from yearly to monthly is far bigger than the jump from monthly to daily.
Worked example
Deposit 10,000 at 8% for 5 years. Compounded yearly it reaches 14,693.28. Compounded monthly it reaches 14,898.46 — the same rate and the same 5 years, but 205.18 more, purely because interest was added twelve times a year instead of once.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is always charged on the original principal. Compound interest is charged on the principal plus all interest already added, so it grows faster the longer you leave it. Our simple interest calculator shows the contrast.
Does compounding frequency really matter?
Yes, but less than people expect. On 10,000 at 8% for 5 years, yearly gives 14,693 and daily gives 14,918 — a difference of about 225. Rate and time move the number far more than frequency does.
How do I work out the interest on its own?
Subtract the principal from the final amount. The calculator shows interest earned as a separate figure so you do not have to.
Can I use this for a loan instead of savings?
For a lump-sum debt with no repayments, yes. For a loan you repay monthly, use the EMI calculator instead.
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