Compound Interest Calculator

Enter the starting amount, annual interest rate, number of years, and number of compounding periods per year, then select Calculate. Use 1 for annual compounding or 12 for monthly compounding. The tool models growth of a single starting amount; it does not add regular contributions.

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THE COMPOUND-INTEREST FORMULA

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A = P × (1 + r/n)^(n × t). Here, A is the final balance, P is the starting principal, r is the annual rate expressed as a decimal, n is the number of compounds per year, and t is time in years. For a 5% rate, r is 0.05 in the formula, although the rate field is entered as 5.

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WORKED EXAMPLES

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At 5% compounded annually, $1,000 grows to about $1,628.89 after 10 years. The final balance includes the original $1,000, so the interest earned is about $628.89. At 10% compounded annually for 2 years, $1,000 becomes $1,210: the second year earns interest on $1,100, not just the original $1,000.

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FREQUENCY AND ASSUMPTIONS

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For the same positive nominal annual rate, more frequent compounding produces a higher final balance. Compare scenarios using the same rate definition; a nominal rate and an effective annual yield are not the same measure. At 0%, the final balance remains the starting principal.

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This mathematical projection assumes a constant rate and reinvested interest, without withdrawals, extra deposits, fees, or taxes. Inflation can reduce the purchasing power of the final amount. Market returns can vary and are not guaranteed to follow a constant-rate calculation. Use the result to explore assumptions, not as a prediction of an investment’s actual performance.