What Is Compound Interest?
Compound interest is interest calculated on both your original principal and the interest that has already accumulated. Over time, this causes your investment to grow faster than simple interest.
Compound Interest Formula
Where P is the principal, r is the annual interest rate, n is the compounding frequency per year, and t is time in years. Monthly contributions, if any, are added on top using monthly compounding.
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Frequently Asked Questions
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods, causing growth to accelerate over time.
Yes. More frequent compounding (like monthly or daily) results in slightly more growth than less frequent compounding (like annually), for the same nominal interest rate.
Yes. The calculator can be used online without creating an account.
This tool provides estimates for informational purposes only and is not financial or investment advice.