Compound Interest Calculator

Use our online compound interest calculator to quickly determine interest payable on your loans or earnings on your investments.
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A compound interest calculator is a great financial tool used to estimate the growth of an investment or the total repayment amount on a loan. It factors in the initial principal, interest rate, compounding frequency, and time. By applying the compound interest formula, these calculators provide precise projections, enabling individuals to make informed financial decisions.

What is compound interest?

Compound interest is the interest calculated on the initial principal and accumulated interest from previous periods. Unlike simple interest, it grows exponentially, as each interest payment contributes to the principal for subsequent calculations. This compounding effect allows investments or loans to grow or accumulate faster over time.

How to calculate monthly compound interest?

The formula for compound interest is A = P(1 + r/n)^(nt),

In this formula, the variables are as follows:


Compound Interest




Rate of Interest


Number of years


Number of times interest compounds in a year

To make it clear, A is the future value, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. Adjust variables accordingly for monthly calculations.

What is compound interest calculator?

A compound interest calculator is a financial tool that determines the interest amount payable on your loan or the potential return on your investment. To use, input the initial amount (principal), the annual interest rate, the investment duration, and the frequency of compounding. The calculator then computes the value, factoring in compounding.  Users can swiftly grasp the impact of varying interest rates or compounding frequencies on their financial outcomes. This user-friendly tool enables individuals to make informed decisions about investments or loans by providing clear insights into the compounding effects of their money over time.

How to use compound interest calculator?

Using our compound interest calculator is very easy. You just need to follow the below-mentioned steps.

  • Enter the principal amount, rate of interest, and tenure you wish to calculate compound interest for.
  • That’s it. The calculator will display the results within seconds.

How to calculate daily compound interest?

To calculate daily compound interest, use the formula: A = P(1 + r/n)^(nt), where A is the future value, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per day, and t is the number of days. Adjust variables for daily compounding.

Advantages of using our compound interest calculator

Our compound interest loan calculator ensures user-friendly functionality, delivering swift and precise interest calculations. This tool supports effective financial planning, enabling users to transparently evaluate loan terms. Here are the few reasons why you should use an online compound interest calculator:

  • Accurate projections: Obtain precise forecasts of loan growth over time for informed financial planning.
  • User-friendly interface: Ensure accessibility for users with varying levels of financial expertise through an intuitive and easy-to-use design.
  • Quick comparisons: Facilitate swift comparisons between different loan scenarios, aiding in decision-making.
  • Real-time calculations: Eliminate the need for manual computations, saving time and reducing the risk of errors.
  • Comprehensive insights: Empower users with a holistic understanding of compound interest dynamics for better financial management.
  • Reliable results: Provide users with dependable and trustworthy financial insights for effective long-term financial planning.

Frequently asked questions

What is compound interest?

Compound interest is the interest earned/ imposed on the principal amount, wherein the current compounding interval’s interest is added to the principal amount for the next interval.

Can I include regular withdrawals with compound interest?

Most compound interest calculators focus on fixed investments, but for scenarios with regular withdrawals, you may need a more sophisticated financial calculator or software. Consider consulting a financial advisor or using specialised tools that account for ongoing contributions or withdrawals to get accurate projections for your specific financial situation.

When is my interest compounded?

The frequency of interest compounding depends on the terms of your financial arrangement. Common compounding periods include annually, semi-annually, quarterly, monthly, or daily. Check your investment or loan agreement for details. More frequent compounding often leads to higher overall interest accumulation.

How is compound interest calculated?

Compound interest is calculated using the formula: A = P (1 + r/n)^(nt), where A is the future value of the investment, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years the money is invested.

How does compound interest differ from simple interest?

Simple interest is calculated only on the initial principal amount, whereas compound interest considers the interest accrued on both the initial principal and the accumulated interest from previous periods.

What is the difference between APR and APY?

APR (Annual Percentage Rate) represents the actual yearly cost of funds over the term of a loan, including any fees or additional costs. APY (Annual Percentage Yield), on the other hand, reflects the total amount of interest earned or paid on an account, based on the interest rate and the frequency of compounding within a one-year period.

Read more on APR vs APY

Can a compound interest calculator be used for loans as well?

Yes, compound interest calculators can be used for both loans and investments. For loans, you input the loan amount, interest rate, compounding frequency, and the loan tenure.

Can compound interest calculators be used for fixed Interest rates?

Yes, compound interest calculators are suitable for fixed interest rates as well. Whether it's a savings account, loan, or investment with a consistent interest rate, these calculators accurately determine future values by compounding the fixed rate over time. They're valuable tools for various financial planning scenarios with stable interest rates.

Can a compound interest calculator help determine the best loan option?

Yes, a compound interest calculator can compare different loan options by calculating the total repayment amount, helping borrowers choose the most cost-effective loan based on their financial situation.

Is the interest rate the only factor affecting loan repayment?

While interest rate significantly impacts loan repayment, the frequency of compounding and the loan terms also play crucial roles. Longer tenure can also lead to increased total repayment amounts.

What is RoR/TWR?

RoR (Rate of Return) and TWR (Time-Weighted Return) are financial metrics used to evaluate investment performance. RoR measures gains or losses over a specific period, while TWR eliminates the impact of cash flows, providing a clearer picture of investment performance over time, especially for portfolios with multiple contributions or withdrawals.

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