Compound Interest Calculator

This free online compound interest calculator projects how an investment grows when interest is reinvested. Start by entering your principal, annual percentage rate, and total number of years. Choose a compounding frequency such as annually, quarterly, or monthly to match the offer you are evaluating.

1. Input the lump-sum principal you plan to deposit or borrow.
2. Select the nominal annual percentage rate provided by your bank or lender.
3. Choose how often interest compounds, from annual to daily schedules.
4. Enter the total term in years, including decimals for partial years.

Press Calculate to display the future value and the total interest earned. Adjust the frequency or term to see the impact of compounding more frequently or holding the investment longer.

The calculator uses the standard formula A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate expressed as a decimal, n is the number of compounding periods per year, and t is the number of years. The exponent multiplies the frequency by the time to capture every compounding event.

For example, investing $10,000 at 6% compounded monthly for 5 years results in A = 10,000 × (1 + 0.06 / 12)^(12 × 5) = $13,488. The interest earned is $3,488, which is higher than the $3,000 simple interest would produce over the same period. That difference illustrates the power of compounding.

Compound interest projections help investors compare savings accounts, plan retirement contributions, and evaluate the cost of debt products such as credit cards or student loans. Use the tool to test how increasing the frequency from annual to monthly compounding accelerates growth.

This calculator models lump-sum deposits without recurring contributions or withdrawals. For strategies that involve regular payments, pair it with our loan payment calculator to map out amortization schedules and see how extra payments affect the balance.