💰 Financial
Compound Interest Calculator
Calculate how your money grows when you earn interest on both your initial principal and your accumulated interest over time.
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Formula
A = P(1 + r/n)^(nt)A- Final balance
P- Initial principal
r- Annual interest rate
n- Compounding frequency per year
t- Time in years
Example
Daily vs Annual Compounding
Investing $10,000 at 6% for 10 years.
- Annual Compounding (n=1): $10,000 × (1 + 0.06)^10 = $17,908.48
- Daily Compounding (n=365): $10,000 × (1 + 0.06/365)^(365×10) = $18,220.30
- Result: Daily compounding earns you $311.82 more over 10 years.
Frequently Asked Questions
It is a mental math shortcut: divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 8%, money doubles in about 9 years.
It refers to how often the interest is calculated and added to your balance. The most common frequencies are daily, monthly, quarterly, and annually.
Authoritative References & Standards
- Compound Interest Fundamentals & Investor Education ↗U.S. Securities and Exchange Commission (SEC)
Regulatory guide on mathematical compounding, rate of return, and investment accumulation.