Compound Interest Calculator
Calculate how your money grows with compound interest over time
About this calculator
A compound interest calculator helps you determine how your investments or savings will grow over time when interest is earned not only on your initial principal but also on previously earned interest. This powerful financial tool demonstrates the exponential growth potential of your money, making it essential for retirement planning, investment decisions, and setting realistic financial goals. Understanding compound interest is crucial for building long-term wealth.
How to use
Enter your initial investment amount, annual interest rate, and time period in years. Select how frequently interest compounds (annually, monthly, or daily). The calculator will instantly show your final amount, total interest earned, and year-by-year growth breakdown to visualize your investment's progression.
Frequently asked questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and previously earned interest, creating exponential growth over time.
How often should interest compound for maximum growth?
Daily compounding typically yields the highest returns, followed by monthly, then annual compounding for the same interest rate.
What's the difference between simple and compound interest?
Simple interest is calculated only on the principal amount, while compound interest includes interest earned on previous interest payments.