Compound Interest Calculator
.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
box-shadow: 0 2px 4px rgba(0,0,0,0.1);
}
.calculator-title {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.calculator-form {
display: grid;
grid-template-columns: 1fr;
gap: 15px;
}
.form-field {
display: flex;
flex-direction: column;
}
.form-field label {
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.form-field input[type="number"],
.form-field select {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
}
button {
background-color: #4CAF50;
color: white;
padding: 12px 20px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
transition: background-color 0.3s ease;
}
button:hover {
background-color: #45a049;
}
.calculator-result {
margin-top: 20px;
padding: 15px;
background-color: #e9f7ef;
border: 1px solid #d0e9c6;
border-radius: 4px;
text-align: center;
font-size: 18px;
color: #333;
}
.calculator-result strong {
color: #4CAF50;
}
function calculateCompoundInterest() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var years = parseFloat(document.getElementById("years").value);
var compoundingFrequency = parseInt(document.getElementById("compoundingFrequency").value, 10);
var resultElement = document.getElementById("result");
// Validate inputs
if (isNaN(principal) || isNaN(annualInterestRate) || isNaN(years) || isNaN(compoundingFrequency) ||
principal <= 0 || annualInterestRate < 0 || years <= 0 || compoundingFrequency <= 0) {
resultElement.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var ratePerPeriod = annualInterestRate / 100 / compoundingFrequency;
var numberOfPeriods = years * compoundingFrequency;
var futureValue = principal * Math.pow((1 + ratePerPeriod), numberOfPeriods);
var totalInterestEarned = futureValue – principal;
resultElement.innerHTML = "Future Value:
$" + futureValue.toFixed(2) + "" +
"Total Interest Earned:
$" + totalInterestEarned.toFixed(2) + "";
}
Understanding Compound Interest
Compound interest is often called the "eighth wonder of the world" because of its power to significantly grow your investments over time. Unlike simple interest, which is calculated only on the initial principal amount, compound interest is calculated on the initial principal *and* on the accumulated interest from previous periods. This means your money works harder for you, generating earnings on your earnings.
The formula for compound interest is:
A = P (1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interestP = the principal investment amount (the initial deposit or loan amount)r = the annual interest rate (as a decimal)n = the number of times that interest is compounded per yeart = the number of years the money is invested or borrowed for
Key Factors Affecting Compound Interest:
- Principal Amount: The larger your initial investment, the more significant your compounded growth will be.
- Interest Rate: A higher interest rate leads to faster growth. Even small differences in rates can have a substantial impact over long periods.
- Time: The longer your money is invested, the more time compounding has to work its magic. This is why starting early with investments is crucial.
- Compounding Frequency: The more frequently interest is compounded (e.g., daily vs. annually), the slightly higher your final return will be, as interest starts earning interest sooner.
Example Calculation:
Let's say you invest $1,000 (Principal) with an annual interest rate of 5% (0.05). If the interest is compounded monthly (n=12) for 10 years (t=10), your investment would grow as follows:
A = 1000 * (1 + 0.05/12)^(12*10)
A = 1000 * (1 + 0.00416667)^120
A = 1000 * (1.00416667)^120
A = 1000 * 1.647009
A ≈ $1,647.01
In this example, you would earn approximately $647.01 in interest over 10 years, thanks to the power of compounding.
Use the calculator above to see how different principal amounts, interest rates, timeframes, and compounding frequencies can impact your potential investment growth!