Online Calculators > Financial Calculators > Compound Interest Calculator
Compound Interest Calculator - Weekly, Daily, Monthly or Yearly Compounding
Compound Interest Calculator Weekly, daily, monthly or yearly compounding with monthly contributions to calculate how much your money can grow using compound interest.
Compound interest calculator with monthly contributions gives you the option to include monthly & yearly contributions.
The daily compound interest calculator can be used to calculate loans, investments or savings with compound interest.
A compound interest formula can be found below on how to calculate compound interest.
Compound Interest Formula
Below is the compound interest formula on how to calculate compound interest.
A = P (1 + r/n)^(nt)
Where:
A = is the future value of investment/loan including interest earned
P = is the the principal investment or loan amount
r = is the the annual interest rate in decimal
n = is the number of times that interest will be compounded per year
t = is the number of years the money is invested or borrowed
How to Calculate Compound Interest
To use the above compound interest formula, you will need a few variables defined, mainly the princial amount, annual interest rate, number of years, and the compound periods.
For example, to find out how much would $10,000 grow in 10 years with an annual interest rate of 5% and compound monthly, we will plugin the variables to the compound interest formula.
A = (10000)(1+0.05/12)^(12*10) = $16,470.09
Your $10,000 initial principal will grow into $16,470.09 in 5 years.
Compound Interest Calculator with Monthly Contributions
Compound Interest Calculator with contributions (monthly & annual contributions) gives you the option to calculate how much your money can grow with additional monthly or annual contributions. You also have the
option to adjust when whether the contribution be made at the start or end of each compound period.
Compound Interest Calculator
The online daily compound interest calculator is useful whether you are trying to save money, investing or paying off loans. You can add monthly or yearly
contributions for your daily interest calculation or leave the field as $0 if you do not wish to make regular contributions.
Weekly Compound Interest Calculator
By default, the calculator is a weekly compound interest calculator, you can change the weekly to daily, monthly or any other compound period for your need.
How to use the compound interest formula?
Compound interest is the formula that wealthy people use to get ahead in life financially. All the rich people know how to use the compound formula in real life to turn money into more money.
Each of us has only 24 hours a day. If we rely only on our labor to make money, there is a limit to how much we can make. However, if we utilize compound interest to grow our money, even if we don't become wealthy, we can still retire comfortably.
To take advantage of compound interest, we must learn how to invest our money. If we deposit our money in a bank's savings account, we get less than a 1% interest. The inflation rate is over 1% each year, meaning our money in the bank is losing value each year.
The same one hundred dollars that we deposited in the bank ten years ago is worth much less today because everything gets more expensive, and the purchasing power of the same amount of money is less than ten years ago.
To take advantage of the compound interest, we must invest the money in stocks, bonds, or real estate. Through investing, our money can grow 5-12% each year instead of losing value. Historically, in the long term, the stock market and real estate in the US always goes up.
How to use the compound interest to grow your money?
Of course, there are always risks involved in any type of investment. One needs to be ready for the risks in order to reap the reward. Investing doesn't simply mean you have someone else do the work for you, you should learn how investing works before you put your hard-earned money into it.
The average American hardly has any savings each month. Most Americans live paycheck to paycheck. If you want to invest, you must save a portion of your paycheck and dedicate that money to your investment account.
Instead of investing what's leftover from your paycheck after spending, you should put 10%-15% of your paycheck into your investment account before you start spending it.
The earlier you start investing, the better off you will be. The compound interest calculator will show you how much your money will grow after a certain year with options for monthly or yearly contributions.
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