Compound Interest Calculator
See how your money grows with compound interest. Our AI explains the results and gives personalized tips.
What is Compound Interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It's often called "interest on interest" and is one of the most powerful forces in finance. Albert Einstein reportedly called it the "eighth wonder of the world."
How Does Compound Interest Work?
When you invest or save money, you earn interest on your initial deposit. With compound interest, you then earn interest on both your original deposit AND the interest you've already earned. Over time, this creates exponential growth — your money starts growing faster and faster.
The Compound Interest Formula
A = P(1 + r/n)^(nt)
- A = Final amount
- P = Principal (initial investment)
- r = Annual interest rate (decimal)
- n = Number of times interest compounds per year
- t = Number of years
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