Calculate compound interest using the formula A = P(1 + r/n)^(nt), where P is principal, r is annual interest rate, n is compounding frequency, and t is time in years. See how your money grows with monthly, quarterly, or annual compounding. Visualize the power of compound interest over time.
â Frequently Asked Questions
Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus previously accumulated interest, causing exponential growth over time.
More frequent compounding yields slightly higher returns. Monthly compounding (n=12) is common for savings accounts, while annually (n=1) is typical for some investments.