Calculate Compound Interest
The website supports the calculation of "single interest" and "compound interest", and provides comparison charts and chart downloads
What is Compound Interest
"Compound interest" is a method of calculating interest that includes the accumulated interest in the principal amount, achieving the effect of earning interest on interest.
Compound Interest Formula
FV (Future Value): The future value, which is the final amount
PV (Present Value): The present value, which is the principal amount
i: Interest rate or expected rate of return
n: Number of periods
The Effect of Compound Interest
Ex: Principal amount of 100, Annual interest rate of 20%
|1st Year||2nd Year||3rd Year|
|Compound||100 * (1+20%) = 120||120 * (1+20%) = 144||144 * (1+20%) = 173|
|Simple||100 + (100*20%) = 120||120 + (100*20%) = 140||140 + (100*20%) = 160|
In this example, the difference in the second year is 4, and in the third year it is 13. As the period increases and the interest rate becomes higher, the effect of compound interest becomes more and more apparent.
Compound Interest Calculator Instructions
The website supports "Single Compound Interest" and "Regular Compound Interest" calculations, and provides a comparison chart and chart download for "Compound Interest" and "Simple Interest" and "Investment Amount".
Single Compound Interest Calculation
Only need to fill in "Principal", "Annual Interest Rate", "Term", and the default compound frequency is "Year", which can be changed to "Month". After clicking "Calculate", the chart of end-of-year amounts and return rates will be generated on the right side and available for download.
Regular Compound Interest Calculation
In addition to the "Principal", "Annual Interest Rate", and "Term" originally filled in, please check "Regular Investment", enter the "Monthly Investment Amount", and the investment amount starts to be calculated from the second month. Because the investment frequency is "Month", the compound frequency is only provided in "Month" units. After clicking "Calculate", the chart of end-of-year amounts and return rates will be generated on the right side and available for download.