Compound Interest Calculator - Investment Return Calculator
Calculate your future value with our compound interest calculator using initial investment and regular contributions. See how your investment grows with different compounding frequencies.
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What is Compound Interest and How is it Calculated?
Compound interest is when your investment earns interest on both the principal amount and previously earned interest. This 'interest on interest' effect causes your investment to grow exponentially over time. Einstein called compound interest 'the eighth wonder of the world' because it makes a huge difference in long-term investments.
The calculation formula is: FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]. Where P is initial principal, PMT is regular contribution, r is annual interest rate, n is compounding frequency, and t is number of years. Higher compounding frequency (monthly, daily) increases returns.