Calculate maturity value and total interest earned with different compounding frequencies.
Compound Interest Calculator
The Compound Interest Calculator shows how money grows when interest earns interest, and lets you compare annual, quarterly, monthly, and daily compounding side by side.
How compounding works
Compound interest uses A = P(1 + r/n)nt, where P is the principal, r the annual rate, n the number of times interest compounds per year, and t the years. Because each period's interest is added to the balance before the next is calculated, growth accelerates over time - the effect Einstein reputedly called the eighth wonder of the world.
Compounding frequency matters
The more often interest compounds, the more you earn: monthly beats annual, and daily beats monthly, though the gaps narrow. The calculator makes the difference concrete and shows the total interest earned versus your original deposit. For interest that is not reinvested, compare with the Simple Interest Calculator.
Frequently Asked Questions
Why does compound interest grow faster over time?
Each period's interest is added to the balance, so future interest is calculated on a larger amount. This snowball effect grows more powerful the longer you invest.
Does compounding frequency really matter?
Yes. More frequent compounding (monthly or daily) earns more than annual compounding, though the additional benefit gets smaller as frequency increases.
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is principal, r the annual rate, n the compounding periods per year, and t the number of years.
How is this different from simple interest?
Simple interest is charged only on the principal, so it grows in a straight line; compound interest grows on principal plus accumulated interest.
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