Use the Compound Interest Calculator to see how an amount can grow when interest is earned not only on the original amount, but also on interest earned in earlier years.
How to Use
Enter the starting amount, the annual interest rate as a percentage, and the number of years. Then press Calculate to see the final amount and the total interest earned.
Formula in Plain Words
Each year, the amount is multiplied by one plus the interest rate written as a decimal. After the chosen number of years, that gives the final amount. The interest earned is the final amount minus the starting amount. This calculator compounds once a year.
Worked Example
Start with 1000 at 10% a year for 2 years. After one year the amount is 1100, and after two years it is 1210. The interest earned is 210.
FAQs
How is compound interest different from simple interest?
With simple interest, interest is paid only on the original amount. With compound interest, interest is also earned on interest from earlier years, so growth speeds up over time.
Does this calculator compound monthly?
No. It compounds once a year, which keeps the result easy to check by hand.
Why does a longer period make such a big difference?
Because each year the interest is calculated on a larger amount, the extra growth builds on itself year after year.