Compound Interest Calculator

The compound interest formula is:

A = P(1 + r/n)^(nt) + PMT × (((1 + r/n)^(nt) - 1) / (r/n))

Where:

• A = Final amount
• P = Principal (initial investment)
• r = Annual interest rate (in decimal form)
• n = Number of times interest is compounded per year
• t = Time in years
• PMT = Regular payment amount

Compound interest creates an exponential growth effect that becomes more powerful over time. This is why starting to invest early, even with smaller amounts, can lead to significant wealth accumulation over the long term.

The more frequently interest is compounded, the more your money will grow. For example:

• Annual compounding: Interest calculated once per year
• Monthly compounding: Interest calculated 12 times per year
• Daily compounding: Interest calculated 365 times per year

A $10,000 investment at 5% annual interest would grow differently:

• Annually: $12,762.82 after 5 years
• Monthly: $12,833.59 after 5 years
• Daily: $12,840.03 after 5 years