# Compound Interest Calculator

## About Compound Interest Calculator

This calculator is used to calculate the compound interest accrued and the final amount of your loan or investment.

### Using Compound Interest Calculator

- Select the currency of your choice.
- Enter the initial investment or loan amount (principal amount).
- Enter the interest rate.
- Select the compounding period from the drop down.
- Enter the loan or investment duration either in the form of years, months and days or by specifying the starting and ending date.
- Finally, click the Calculate Compound Interest button. The compound interest for your principal amount will be calculated and the result will be displayed in the result section below the button.

## Compound Interest

**Compound Interest** is the type of interest calculated on your initial investment amount or loan amount (principal) along with the interest accrued over the previous period of time. Here, interest accrued in the previous compounding period is added back to the principal amount so as interest is calculated on the already-accrued interest during the next compounding period. i.e. Interest is calculated on the already accrued interest.

### Formula to Find Compound Interest

A = P (1 + r/n)^{nt}

##### Where:

- A = Final Amount
- P = Principal Amount
- r = Annual Interest Rate (in decimal)
- n = Compounding Period (number of times interest applied per year)
- t = Time (in years)

From the above formula, you can find the **Final Amount** (A) first. Then, if you want to find the **Interest Accrued** (CI), then subtract the principal from the final amount.

### Formula to Find Final Amount

CI = A - P

##### Where:

- CI = Compound Interest
- A = Final Amount
- P = Principal Amount

Page Last Modified On:** May 28, 2020 **

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