Compound Interest Calculator

What is Compound Interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods. This is often called "interest on interest" and can significantly grow your money over time.

How to Use This Calculator

Enter your initial investment (principal), annual interest rate, investment period in years, and compounding frequency. The calculator will show your final amount and total interest earned.

Compound Interest Formula

A = P(1 + r/n)^(nt)

Where:
A = Final amount
P = Principal (initial investment)
r = Annual interest rate (decimal)
n = Compounding frequency per year
t = Time in years

Why Compound Interest Matters

Albert Einstein allegedly called compound interest the "eighth wonder of the world." Starting to invest early, even with small amounts, can lead to significant wealth over time due to the compounding effect.

FAQ

What's better: more frequent compounding or less?
More frequent compounding (like daily) yields slightly more than less frequent (like annual), but the difference is usually small for typical investments.