Result
Compound Interest Calculator
Estimate investment growth using principal, annual interest rate, time and compounding frequency.
How to check this result
Use the annual rate, compounding frequency and contribution timing consistently.
Method and assumptions
Compound interest adds earned interest to the balance, so later interest can be calculated on a larger amount.
Before making a decision
The result is an illustration, not a promise of investment return or a substitute for financial advice.
Compounding frequency and growth
Method and inputs
Enter the starting balance, annual percentage rate, years and the number of compounding periods per year. Annual compounding uses 1, quarterly 4 and monthly 12. The formula is A = P(1 + r/n)^(nt), with the annual percentage divided by 100 to obtain r.
Worked example
Starting with 1,000 at 5% compounded annually for two years gives 1,000 × 1.05² = 1,102.50. Interest earned is 102.50. The second year earns 52.50 because the first year’s interest remains invested.
Limits and common mistakes
This tool assumes one initial deposit, a constant rate and reinvested interest. It does not add monthly contributions or subtract tax, inflation or fees. A projected balance is not a promised return.
Is an annual nominal rate the same as an effective rate?
No. At 5% nominal compounded monthly, the effective annual rate is (1 + 0.05/12)^12 − 1, about 5.116%. Use the rate convention stated by the provider.
Content updated: 2026-10-03.