What is Compound Interest?
Work out what a lump sum grows into over time. Because compounding frequency changes the result, you can switch between yearly, half-yearly, quarterly and monthly to match how your deposit or investment actually pays.
How to use Compound Interest
- Enter your principal — the amount you are investing or depositing.
- Set the annual interest rate.
- Choose the time period in years.
- Select the compounding frequency, then read the interest earned and maturity amount.
Why use this tool?
Frequency matters more than people expect
The same rate compounded monthly rather than yearly produces a noticeably higher maturity value, especially over long periods.
Separates principal from growth
Seeing interest earned apart from your original deposit shows exactly how much the compounding did for you.
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years.
How is this different from simple interest?
Simple interest is always calculated on the original principal. Compound interest is calculated on the principal plus interest already earned, so growth accelerates over time.
Is this tool really free?
Yes, completely free with no limits, no watermarks, no account and no trial period. Because everything runs on your own device, there are no server costs to pass on to you.