Compound Interest Calculator
Calculate compound interest, final amount, and effective annual rate for investments and savings
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It makes your money grow faster than simple interest.
How does compounding frequency affect returns?
More frequent compounding results in slightly higher returns because interest is calculated and added to the principal more often. Daily compounding earns more than annual compounding at the same rate.
What is the effective annual rate?
The effective annual rate (EAR) is the actual annual return accounting for compounding. It is always equal to or higher than the nominal rate when compounding occurs more than once per year.