How to Calculate Compound Interest
Calculate how money grows with compound interest over time.
The Formula
A = P(1 + r/n)^(nt)The compound interest formula uses the mathematical relationship: A = P(1 + r/n)^(nt). Each variable in the formula represents a measurable quantity that affects the final result.
Step-by-Step Method
- 1Identify all input values needed for the compound interest calculation.
- 2Substitute your known values into the formula: A = P(1 + r/n)^(nt).
- 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
- 4Check that your result has the correct units and is within a reasonable range.
- 5Verify using the interactive Compound Interest Calculator to confirm your answer.
Related Topics
compound interestinvestmentsavings
Use the Interactive Calculator
Skip the manual math — get instant results with our free Compound Interest calculator.