Compound Interest Calculator

Online investment compound interest calculator

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Compound Interest

  • Compound interest is the interest either loan or deposit, calculated on the initial deposit (principal) and the accumulated interest from the previous period.

    Total interest = FV - P
    Where:
    FV = Future value
    P = Initial principal balance

    Formula:

    FV = P x (
    1 +
    r
    n
    )(n x t)

    FV = Future value (final amount)
    P = The initial investment (initial principal balance)
    r = Interest rate
    n = Number of times compounded per year
    t = Term (number of time periods)

  • Formulas if there are contributions:

    If the additional deposit is made at the end of the period, it can be the end of the month, quarter, year, etc...

    FV = [P x (
    1 +
    r
    n
    )(n x t)] + [PMT x [((
    1 +
    r
    n
    )(n x t) - 1)
    ÷
    r
    n
    ]]

    FV = [P x (1 + r ÷ n )(n x t)] + [ PMT x [((1 + r ÷ n)(n x t) - 1) ÷ (r ÷ n)] ]

    If the additional deposit made at the beginning of period

    FV = [P x (
    1 +
    r
    n
    )(n x t)] + [[PMT x [((
    1 +
    r
    n
    )(n x t) - 1)
    ÷
    r
    n
    ]]x(
    1 +
    r
    n
    )]

    FV = [P x (1 + r ÷ n )(n x t)] + [[ PMT x [((1 + r ÷ n)(n x t) - 1) ÷ (r ÷ n)] ] x ( 1 + r ÷ n )]

    Where PMT is the additional payment

    If the periodic payment doesn't match the frequency of compounding.

    Formula will be:

    FV = [P x (1 + r ÷ n )(n x t)] + [ PMT x ([(1 + r ÷ n)(n x NP)](NP x t) -1) ÷ [(1 + r ÷ n)(n x NP) -1] ]

    Where NP is the number of payment per year