Compound Interest Calculator
Compound interest calculation
The amount after n years A nis equal to the initial amount A 0times one plus the annual interest rate r divided by the number of compounding periods in a year m raised to the power of m times n:
A nis the amount after n years (future value).
A 0is the initial amount (present value).
r is the nominal annual interest rate.
m is the number of compounding periods in one year.
n is the number of years.
Example #1:
Calculate the future value after 10 years present value of $5,000 with annual interest of 4%.
Solution:
A 0= $5,000
r= 4% = 4/100 = 0.04
m= 1
n= 10
A 10= $5,000·(1+0.04/1) (1·10)= $7,401.22
Example #2:
Calculate the future value after 8 years present value of $35,000 with annual interest of 3% compounded monthly.
Solution:
A 0= $35,000
r= 3% = 3/100 = 0.03
m= 12
n= 8
A 8= $35,000·(1+0.03/12) (12·8)= $44,480.40
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