Compound Interest Calculator
Calculate how your investments grow with compound interest and regular contributions
Understanding Compound Interest
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. It's often called "interest on interest" and can significantly boost investment returns over time.
The Power of Compounding
- Time: The longer you invest, the more powerful compounding becomes
- Rate: Higher interest rates accelerate growth exponentially
- Frequency: More frequent compounding leads to better results
- Regular Contributions: Adding money regularly maximizes growth potential
Compound Interest Formula
A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]
- A = Final amount
- P = Principal (initial investment)
- r = Annual interest rate (as decimal)
- n = Compounding frequency per year
- t = Time in years
- PMT = Regular payment amount