Compound Interest Calculator

The calculator applies the compound interest formula A = P × (1 + r/n)^(n×t), where P is your principal (starting amount), r is the annual nominal rate — the rate you were quoted, before accounting for compounding — as a decimal, n is the number of compounding periods per year (12 for monthly compounding), and t is the number of years.

Because interest gets added to the balance more than once a year, more frequent compounding produces a slightly higher effective annual rate — the rate you actually earn — than the nominal rate you were quoted. Here, a quoted 7.00% compounds to an effective 7.23% per year.