How is compound interest different from simple interest?

Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus previously earned interest, which grows faster.

Does compounding frequency matter?

Yes. More frequent compounding (daily vs. yearly) produces slightly higher returns for the same rate.

Compound Interest Calculator

See how your savings grow with compound interest across different compounding frequencies.

Amount / first value

Rate or second value

Years / third value

amount

245,135.71

interest

145,135.71

Compound interest is interest earned on both your original principal and on the interest already added. This calculator shows your final balance and the interest earned for any compounding frequency.

Formula

A = P \left(1 + \frac{r}{n}\right)^{n t}

P is the principal, r is the annual rate (as a decimal), n is the number of times interest compounds per year, and t is the time in years.

How to use

1Enter your starting principal.
2Enter the annual interest rate.
3Choose how often interest compounds.
4Enter the number of years and read your final amount.

Example

10,000 invested at 8% compounded monthly for 5 years grows to about 14,898, earning 4,898 in interest.

Frequently asked questions

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