This calculator helps you estimate the future value of an investment or savings account with compound interest. Compound interest is calculated on the initial principal, which also includes all of the accumulated interest from previous periods. It's often referred to as "interest on interest."
Compound interest is a powerful concept in finance. Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal amount plus the accumulated interest. This means your money grows at an accelerated rate over time. The more frequently your interest is compounded (e.g., daily versus annually), the faster your investment will grow, assuming the same annual interest rate.
The formula used to calculate the future value (FV) of an investment with compound interest is:
FV = P (1 + r/n)^(nt)
Where:
FV = Future Value of the investment/loan, including interest
P = Principal investment amount (the initial deposit or loan amount)
r = Annual interest rate (as a decimal)
n = Number of times that interest is compounded per year
t = Number of years the money is invested or borrowed for
function calculateCompoundInterest() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var compoundingFrequency = parseInt(document.getElementById("compoundingFrequency").value);
var years = parseFloat(document.getElementById("years").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(principal) || isNaN(annualInterestRate) || isNaN(compoundingFrequency) || isNaN(years)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (principal <= 0 || annualInterestRate < 0 || compoundingFrequency <= 0 || years <= 0) {
resultDiv.innerHTML = "Please enter positive values for principal, compounding frequency, and years, and a non-negative interest rate.";
return;
}
var rateDecimal = annualInterestRate / 100;
var numberOfPeriods = compoundingFrequency * years;
var factor = Math.pow((1 + rateDecimal / compoundingFrequency), numberOfPeriods);
var futureValue = principal * factor;
resultDiv.innerHTML =
"