Compound Interest Calculator
Formula
A = P(1 + r/n)^(nt)
Compound interest is calculated on the initial principal and all accumulated interest from previous periods. P is the principal, r is the annual rate, n is the number of times interest compounds per year, and t is the number of years.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both your initial deposit and on interest that has already been earned. It makes your money grow faster than simple interest.
How often should interest compound?
More frequent compounding (daily vs annually) yields slightly more interest. Monthly compounding is most common for savings accounts. The difference between monthly and daily is usually small.
What is the Rule of 72?
Divide 72 by your interest rate to estimate how many years it takes to double your money. At 6% interest, your money doubles in about 12 years (72 / 6 = 12).