Compound Interest Calculator

What Is Compound Interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods. Albert Einstein reportedly called it "the eighth wonder of the world."

Compound Interest Formula

A = P × (1 + r/n)^(nt)

Where A = final amount, P = principal, r = annual interest rate (decimal), n = compounding periods per year, t = time in years.

Effect of Compounding Frequency

The more frequently interest compounds, the greater the return. Daily compounding yields slightly more than annual compounding for the same nominal rate.

The Rule of 72

Divide 72 by the annual interest rate to estimate how many years it takes to double your investment. At 8% per year, your money doubles in approximately 9 years.