MTS Institute / Compound interest calculator
Compound interest calculator
Enter amount, rate, years and how often interest compounds to see the final value and total interest.
How it works
Formula: final value = P × (1 + r ÷ n) raised to the power n × t, where P is the starting amount, r the yearly rate, n how often it compounds in a year and t the number of years.
Example: 1,00,000 at 12 percent compounded monthly for 10 years grows to about 3,30,039. The extra 2,30,039 is interest earning interest.
Questions
What is compound interest?
Compound interest is interest earned on both your original money and the interest already added. Over long periods it makes money grow much faster than simple interest.
Does compounding frequency matter?
Yes, a little. Monthly compounding gives a slightly higher result than yearly compounding at the same rate. Time and rate matter far more.
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