Calculate how your savings grow over time with the power of compounding.
Annually
Semi-Annually
Quarterly
Monthly
Daily
Total Future Value:$0.00
Total Interest Earned:$0.00
Initial Principal:$0.00
How Compound Interest Works
Compound interest is often referred to as the "eighth wonder of the world." Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal plus any interest accumulated from previous periods. This creates a "snowball effect" where your money grows at an accelerating rate over time.
The Compound Interest Formula
This calculator uses the standard mathematical formula for compounding:
A = P(1 + r/n)nt
A = the total amount of money accumulated after n years, including interest.
P = the principal investment amount (the initial deposit).
r = the annual interest rate (decimal).
n = the number of times that interest is compounded per unit t.
t = the time the money is invested for in years.
Practical Example
If you invest $10,000 at an annual interest rate of 7%, compounded monthly for 20 years:
Your total balance would grow to $40,387.39.
You would earn $30,387.39 in interest alone.
This demonstrates how time and frequency of compounding can quadruple your original investment without any additional deposits.
Maximizing Your Returns
To get the most out of compound interest, consider three main factors:
1. Time: The longer you leave the money, the faster it grows.
2. Frequency: Interest that compounds monthly grows faster than interest that compounds annually.
3. Rate: Even a 1% difference in interest rates can lead to tens of thousands of dollars in difference over a 30-year period.
function calculateCompoundInterest() {
var p = parseFloat(document.getElementById('principal').value);
var r = parseFloat(document.getElementById('rate').value) / 100;
var t = parseFloat(document.getElementById('years').value);
var n = parseInt(document.getElementById('compounding').value);
var resultsDiv = document.getElementById('results');
if (isNaN(p) || isNaN(r) || isNaN(t) || p <= 0 || t < 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Formula: A = P(1 + r/n)^(nt)
var amount = p * Math.pow((1 + (r / n)), (n * t));
var interest = amount – p;
document.getElementById('totalValue').innerText = "$" + amount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalInterest').innerText = "$" + interest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('initialValue').innerText = "$" + p.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsDiv.style.display = "block";
}