Free compound interest calculator: see future value and interest earned with yearly to daily compounding, plus the CI formula and a worked example.
The compound interest formula is A = P × (1 + r ÷ n)^(n × t), and the compound interest earned (also called the cumulative interest) is CI = A − P. P is the principal, r is the annual rate as a decimal, n is the number of times interest compounds per year and t is the number of years. Interest is added to the balance and then earns interest itself, which is why it is also called interest on interest. This calculator handles a single lump sum. For regular monthly investing, use the SIP calculator.
The calculator opens with these values. Total future value: 16,288.95. Compound interest earned: 6,288.95. Simple interest on the same amount would be 5,000, so 1,288.95 of the total is interest on interest.
Table, effect of compounding frequency (10,000, 5%, 10 years): Yearly 16,288.95 / 6,288.95; Half-yearly 16,386.16 / 6,386.16; Quarterly 16,436.19 / 6,436.19; Monthly 16,470.09 / 6,470.09; Daily 16,486.65 / 6,486.65 (future value / interest earned).
Table, effect of time (10,000 at 5%, yearly) compound vs simple: 5 years 12,762.82 vs 12,500.00; 10 years 16,288.95 vs 15,000.00; 20 years 26,532.98 vs 20,000.00; 30 years 43,219.42 vs 25,000.00.
Effect of the rate (10,000, 10 years, yearly): 4% → 14,802.44; 5% → 16,288.95; 6% → 17,908.48; 8% → 21,589.25; 10% → 25,937.42.
Compare simple and compound interest formulas. Learn why the wealth gap widens exponentially after year 10, the math of delayed investing, and frequency limits.
Use A = P × (1 + r ÷ n)^(n × t), then subtract the principal. For 10,000 at 5% for 10 years, yearly: 10,000 × 1.05^10 = 16,288.95, so the interest is 6,288.95.
CI = P × [(1 + r ÷ n)^(n × t) − 1]. It is the same as the final amount minus the principal.
Each period's interest is added to the balance, so the next period's interest is calculated on a bigger amount. In the example, 1,288.95 of the 6,288.95 earned is interest on interest.
More frequent compounding gives slightly more. For 10,000 at 5% over 10 years, yearly gives 16,288.95 and daily gives 16,486.65. The gap is small compared with the effect of the rate or the time.
The rule of 72 estimates it as 72 ÷ rate. At 8% that is 9 years, and the exact figure is 9.01 years. At 5% it is about 14.4 years by the rule and 14.21 exactly.
No. It calculates growth on a single lump sum. For monthly investing, use the SIP calculator. This is general information, not financial advice.
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