Compound Interest Calculator - Mathematical Calculations & Solutions
Compound Interest Formula: A = P(1 + r/n)^(nt)
How Compound Interest Calculator Works
Enter Principal
Input initial investment amount
Set Parameters
Add rate, time, and frequency
Apply Formula
Calculate using A = P(1 + r/n)^(nt)
View Results
See final amount and interest earned
Common Compound Interest Examples
Main Formula
Interest Earned
Compound Interest Calculator
What
A financial calculator that computes compound interest using the formula A = P(1 + r/n)^(nt) with step-by-step solutions.
Why
Essential for investment planning, loan calculations, savings growth analysis, and financial decision making.
Applications
Banking, investments, mortgages, retirement planning, education savings, and business finance.
Compound Interest Calculation Table
| Principal | Rate | Time | Frequency | Final Amount | Interest Earned |
|---|---|---|---|---|---|
| $1,000 | 5% | 10 years | Monthly | $1,643.62 | $643.62 |
| $5,000 | 8% | 5 years | Quarterly | $7,429.74 | $2,429.74 |
| $10,000 | 6% | 15 years | Annual | $23,965.58 | $13,965.58 |
| $2,500 | 4% | 20 years | Semi-annual | $5,506.35 | $3,006.35 |
| $500 | 12% | 3 years | Daily | $715.70 | $215.70 |
Frequently Asked Questions
How does the compound interest calculator work?
Enter principal amount, interest rate, time period, and compounding frequency. The calculator applies the formula A = P(1 + r/n)^(nt) to compute final amount and interest earned with detailed steps.
What is compound interest?
Compound interest is interest calculated on both the initial principal and accumulated interest from previous periods. It's "interest on interest" that grows exponentially over time.
What inputs are required?
Principal amount (initial investment), annual interest rate (%), time period (years), and compounding frequency (annually, monthly, daily, etc.).
How does compounding frequency affect results?
Higher compounding frequency (daily vs annually) results in more interest earned. Daily compounding typically yields the highest returns, followed by monthly, quarterly, and annual.
What is the compound interest formula?
A = P(1 + r/n)^(nt), where A = final amount, P = principal, r = annual rate, n = compounding frequency per year, t = time in years.
Can I use this for investment planning?
Yes! This calculator is perfect for planning savings accounts, CDs, bonds, retirement funds, education savings, and any investment with compound interest.
What's the difference between simple and compound interest?
Simple interest is calculated only on principal (I = Prt), while compound interest includes interest on previously earned interest, resulting in exponential growth over time.
Is this calculator accurate for financial planning?
Yes, the calculator uses precise mathematical formulas used by financial institutions. However, actual returns may vary due to market conditions, fees, and other factors.