Use our compound interest calculator to estimate how your money grows over time with interest. See total value and interest earned based on your inputs.
This is your final amount after interest and contributions.
Compound interest is the interest you earn on both your original investment and the interest that gets added over time. This type of interest accelerates your savings growth and is often used in long-term financial planning. Unlike simple interest which is only based on the initial amount, compound interest builds up faster especially when compounded frequently.
Use this free compound interest calculator to see how your investment grows over time.
It's a simple way to forecast your savings or plan for long-term financial goals.
Suppose you invest $5,000 at a 6% annual interest rate, compounded monthly, for 15 years. Here's how your money would grow:
| Year | Balance |
|---|---|
| 1 | $5,309.89 |
| 5 | $6,744.25 |
| 10 | $9,095.85 |
| 15 | $12,070.43 |
Compound interest might sound complex, but it is one of the most powerful tools for growing your money, and learning how to calculate it can help you make smarter financial decisions. At its core, compound interest means earning interest on both your original investment (the principal) and the interest that accumulates over time. In other words, your money earns money and that money earns more money.
Formula:
The standard formula for calculating compound interest is:
A = P × (1 + r/n)^(nt)
Where:
Example:
Let's say you have invested $10,000 at an annual interest rate of 5%, compounded monthly for 5 years, So
Now, if we put the values into the formula, then: A = 10,000 × (1 + 0.05 / 12)^(12 × 5) = $12,834.59
So after 5 years, your investment grows to $12,834.59, with $2,834.59 in interest earned
The longer your money stays invested, and the more frequently interest is compounded, the faster your savings grow. This is why compound interest is often called the eighth wonder of the world especially in long-term investing, retirement planning, and wealth-building strategies.
Simple interest is based only on the original amount. Compound interest includes interest on interest, which results in faster growth.
The more frequent the compounding (e.g., monthly or daily), the more you earn. This is because your interest is calculated and added more often.
Yes. You can manually calculate it using the formula which we have provide above. You can place your principal, rate, time, and compounding frequency.
To calculate compound interest in Excel, you can use the formula: =Principal * (1 + Rate/Compounds)^(Compounds * Time). For example, if you invest $5,000 at an annual interest rate of 6% compounded monthly for 3 years, you’d enter =5000*(1+0.06/12)^(12*3). Excel will return the future value of your investment. You can also use Excel’s built-in FV function like this: =FV(0.06/12, 36, 0, -5000), which gives the same result