Compound Interest Calculator
Calculate future investment growth and total earned interest over time
How to Use This Calculator
- Enter your starting deposit in Initial Investment ($).
- Input your expected yearly return rate in Annual Interest Rate (%).
- Specify the total duration of investment in Time Horizon (Years).
- Choose how frequently earnings compound per year in Compounding Frequency.
- Click “Calculate Growth” to see your total balance and earned compound interest.
The Formula Used
Compound interest is computed using the standard financial exponential growth formula:
* Where A = Final Amount, P = Principal, r = Annual Interest Rate (decimal), n = Compounding frequency per year, t = Time in years.
Frequently Asked Questions (FAQ)
What is compound interest?
Compound interest is the interest calculated on the initial principal as well as on all accumulated interest from previous periods.
How does compounding frequency impact earnings?
More frequent compounding intervals (like daily or monthly) generate higher total interest over time compared to annual compounding.
What is the Rule of 72 in compound growth?
The Rule of 72 estimates how many years it takes to double your money by dividing 72 by your annual interest rate.
How is simple interest different from compound interest?
Simple interest yields earnings strictly on the principal amount, whereas compound interest generates returns on accumulated earnings as well.
Does inflation affect compound interest returns?
Yes, inflation reduces real purchasing power over time, so real investment growth equals nominal interest minus the inflation rate.