Compound Interest Calculator
Compound interest calculator helps you estimate how your money grows when earnings are reinvested over time.
What Is a Compound Interest Calculator?
A compound interest calculator helps you estimate how your money grows when earnings are reinvested over time. Unlike simple interest, compound interest earns “interest on interest,” accelerating your savings or investments.
Why Use a Interest Calculator?
✅ Investment Planning – Project returns on stocks, bonds, or retirement accounts
✅ Savings Growth – See how regular contributions boost long-term results
✅ Debt Awareness – Understand how compounding affects loans (credit cards, mortgages)
✅ Goal Setting – Calculate how much to invest to reach financial targets
How Compound Interest Works
Formula:A = P × (1 + r/n)^(n×t)
Where:
- A = Future value
- P = Principal (initial amount)
- r = Annual interest rate (decimal)
- n = Compounding periods per year
- t = Time (years)
Key Variables That Impact Growth
| Factor | Effect |
|---|---|
| Higher Principal | More money compounds faster |
| Higher Rate | Faster growth per cycle |
| More Time | Exponential gains over decades |
| Frequent Compounding | Daily > Monthly > Annually |
Compound vs. Simple Interest
| Type | Growth Pattern | Example: $10,000 at 5%/yr |
|---|---|---|
| Simple | Linear | $15,000 after 10 years |
| Compound | Exponential | $16,289 after 10 years (annual compounding) |
Practical U
- Retirement Planning (e.g., 401(k) growth)
- Education Savings (529 plans)
- Debt Payoff (Credit card interest snowball)
Related Finance Tools
1️⃣ ROI Calculator – Measure investment profitability
2️⃣ Inflation Calculator – Adjust for purchasing power over time
3️⃣ Savings Goal Calculator – Plan for milestones