What is compound interest?

Compound interest is calculated on the initial principal plus all accumulated interest. It's often called 'interest on interest.'

What is the compound interest formula?

A = P(1 + r/n)^(nt), where P=principal, r=annual rate, n=compounds per year, t=years.

Daily compounding yields slightly more than monthly, which yields more than annually. The difference matters most over long timeframes.

Divide 72 by the annual interest rate to estimate the number of years to double an investment. At 6%, money doubles in ~12 years.

APR is the annual rate without compounding. APY (Annual Percentage Yield) includes the effect of compounding within the year.

Calculate compound interest with any compounding frequency. See how your investment grows over time with our detailed amortization table.

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