What is Compound Interest?
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods.
Formula
A = P × (1 + r / n)n × t
Compound Interest Calculator
Calculate compound interest and total investment value
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods.
How is compound interest calculated?
Compound interest is calculated by applying interest to the principal amount repeatedly over a specific compounding period.
What is the compound interest formula?
The compound interest formula is A = P (1 + r/n)^(nt), where P is principal, r is interest rate, n is compounding frequency, and t is time.
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal, while compound interest is calculated on both principal and accumulated interest.
What does compounding frequency mean?
Compounding frequency refers to how often interest is added to the principal, such as yearly, quarterly, monthly, or daily.
Does higher compounding frequency increase returns?
Yes, more frequent compounding generally results in higher returns over time because interest is added more often.
Can this calculator be used for investments and savings?
Yes, this compound interest calculator can be used to estimate returns on investments, fixed deposits, and savings accounts.
Is compound interest suitable for long-term investing?
Yes, compound interest works best over long periods and is a key factor in building wealth through long-term investments.
Is this compound interest calculator accurate?
The calculator provides accurate estimates using standard compound interest formulas, but actual returns may vary depending on financial conditions.
Is this compound interest calculator free to use?
Yes, the compound interest calculator on DailyCalcu is completely free and does not require registration.