Compound interest calculator

How to use

Compound interest is interest that is charged on the interest already earned. Each period the balance grows, and the next period applies the rate to that larger balance — which is why the growth curve bends upwards instead of forming a straight line like simple interest.

• Project how much an investment becomes over time.
• Compare a loan offer with the total it will cost.
• See the difference between simple and compound interest on the same rate.

1. Enter the starting amount.
2. Enter the rate per period, as a percentage.
3. Enter how many periods the money stays invested.
4. The result gives the final balance and the interest earned on top of the principal.

Formula

Balance = principal × (1 + rate ÷ 100)^periods · Interest = balance − principal

Example

1,000 at 1% for 12 periods becomes 1,126.83, with 126.83 of interest. At simple interest the same rate would give 120.

Limitations

• The rate must match the period: an annual rate with monthly periods has to be converted first.
• The calculation assumes no deposits or withdrawals along the way; for those, the final balance is a lower bound.

Frequently asked questions