Compound Interest Calculator
Calculate compound interest returns based on principal, rate, and period.
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How to Calculate
Compound Interest Formula:
A = P(1 + r/n)^(nt)
P = Principal
r = Annual rate
n = Compounding frequency (times per year)
t = Period (years)
Effective Rate = (1 + r/n)^n - 1
More frequent compounding yields a higher effective rate.
Example
FAQ
What is the difference between simple and compound interest?
Simple interest accrues only on the principal, while compound interest accrues on both principal and accumulated interest. The effect grows larger over time.
What is compounding frequency?
It is how often interest is added to the principal. Monthly (12) compounds every month, quarterly (4) every 3 months, and annual (1) once a year.