How to Calculate Compound Interest - Free Compound Interest Calculator

Compound interest is one of the most powerful concepts in finance. Our free compound interest calculator helps you understand how your investments and savings can grow over time.

What is Compound Interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods. This means your money grows faster over time as interest earns interest.

Why Calculate Compound Interest?

• Investment Planning: See how investments grow over time
• Savings Goals: Plan for retirement, education, or major purchases
• Financial Education: Understand the power of compound interest
• Comparison: Compare different investment options

How to Calculate Compound Interest

1. Visit our Compound Interest Calculator
2. Enter your initial principal (starting amount)
3. Enter the annual interest rate
4. Enter the number of years
5. Enter additional monthly contributions (optional)
6. Click "Calculate" to see your results

Calculator Results

The calculator shows:

• Final amount after compounding
• Total interest earned
• Growth over time
• Comparison with simple interest

Compound Interest Formula

The formula for compound interest is: A = P(1 + r/n)^(nt)

• A = Final amount
• P = Principal (initial amount)
• r = Annual interest rate (decimal)
• n = Number of times interest compounds per year
• t = Number of years

Tips for Maximizing Compound Interest

• Start investing early - time is your greatest asset
• Make regular contributions to your investments
• Reinvest dividends and interest
• Choose investments with higher returns (considering risk)
• Avoid withdrawing funds early

Our compound interest calculator is free to use and helps you visualize the power of compound interest for your financial planning.