Compound Interest Calculation
Calculate compound returns based on principal, rate and term.
Enter the principal, annual interest rate, term and compounding frequency.
This calculation provides an estimate; current legislation and official calculation prevail. For binding transactions, consult your accountant or the relevant authority.
$
Result
$43.997,9
Maturity: $43,997.9 · Gain: $33,997.9
Result in all units
Step-by-step solution
A = P × (1 + r/n)^(n·t)
What Is Compound Interest?
Compound interest is a method in which the interest earned is added to the principal and the next period's interest is calculated on this grown amount. Because interest earns interest, money grows exponentially over the long term.
How is it calculated?
How Is Compound Interest Calculated?
Final amount = principal × (1 + r)ⁿ
r: periodic interest rate, n: number of periods.
- Enter the principal, interest rate and number of periods.
- Total interest = final amount − principal.
For example, 10,000 $ at %30 per year for 3 years: 10,000 × 1.30³ ≈ 21,970 $.
Frequently Asked Questions
Does the compounding frequency affect the result?
Yes; for the same annual rate, monthly compounding gives a slightly higher return than annual compounding.
What is the rule of 72?
72 ÷ interest rate gives roughly how many years it takes for your money to double. For %24: 72 ÷ 24 = 3 years.