How to Calculate Compound Interest

Compound interest means you earn returns on both your principal and previously accumulated interest. It is the foundation of long-term savings and investment planning.

The Formula

A = P(1 + r/n)^nt where P is principal, r is annual rate (decimal), n is compounding periods per year, and t is years.

Example

$10,000 at 5% compounded monthly for 10 years grows to about $16,470.

Use our Compound Interest Calculator to model different rates and time horizons.