Compound Interest Calculator

Calculate how your investments grow over time with compound interest. This calculator helps you understand the potential growth of your investments or savings when interest is reinvested.

How to Use This Calculator

1. Enter your Initial Investment (Principal Amount)
2. Input the Annual Interest Rate (as a percentage)
3. Specify the Investment Time Period in years
4. Choose your Compound Frequency (annually, semi-annually, quarterly, monthly, or daily)
5. Add any Regular Contributions (optional) and select the contribution frequency
6. Click “Calculate” to see your results

Understanding the Results

The calculator shows you:

• Final Balance: The total value of your investment after the specified time period
• Total Interest Earned: How much you earned from compound interest
• Total Contributions: Sum of your initial investment and all regular contributions
• Detailed Yearly Breakdown: See how your investment grows year by year

What is Compound Interest?

Compound interest is interest earned on both your initial investment (principal) and previously accumulated interest. It’s often called “interest on interest” and can significantly accelerate wealth building over time.

The Power of Compound Interest

The earlier you start investing, the more time your money has to grow through compound interest. Even small regular contributions can grow into substantial amounts over long periods.

Compound Interest Formula

The basic compound interest formula is:

A = P(1 + r/n)^(nt)

Where:

• A = Final amount
• P = Principal (initial investment)
• r = Annual interest rate (as a decimal)
• n = Number of times interest is compounded per year
• t = Time in years

Tips for Maximizing Compound Interest

1. Start Early: The longer your money compounds, the more it grows
2. Reinvest Returns: Automatically reinvest dividends and interest
3. Make Regular Contributions: Add to your investment consistently
4. Be Patient: Compound interest works best over longer time periods
5. Consider Higher Compound Frequencies: More frequent compounding can lead to higher returns

Common Use Cases

• Retirement savings planning
• Investment growth projection
• Education fund planning
• Emergency fund building
• Long-term wealth accumulation