Nuumia Editorial Team·Based on the ISMA compound interest formula and financial mathematics principles·
Compound Interest Calculator
Calculate the final amount and interest earned with compound interest. Supports periodic deposits, different compounding frequencies, and year-by-year breakdown.
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Quick example
Example: €10.000, 7%, 10 anni, annuale → Final Amount: €19,671.51(Total Interest Earned: €9,671.51)
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Compound Interest Calculator — Formula A = P(1 + r/n)^(nt)
Compound interest is the process by which interest earned is reinvested and itself earns interest in subsequent periods. Often called the eighth wonder of the world, it allows capital to grow exponentially over time through periodic compounding.
How Compound Interest Works
The compound interest formula is A = P × (1 + r/n)n×t, where P is the principal, r the decimal annual rate, n the number of compounding periods per year and t the duration in years. A is the final amount including both principal and interest.
A = P × (1 + r/n)^(n·t)
EAR = (1 + r/n)^n − 1
Year-by-Year Growth
Esempio: €10.000 al 5% per 10 anni con frequenze diverse.
Compounding Frequency
Final Amount
Effective Annual Rate (EAR)
Annually
€16,288.95
5.000%
Semi-annually
€16,386.16
5.063%
Quarterly
€16,436.19
5.095%
Monthly
€16,470.09
5.116%
Daily
€16,486.65
5.127%
FAQ — Compound Interest
Compound interest is a mechanism where the interest earned each period is added to the principal, so that in subsequent periods interest is earned on a larger amount. Unlike simple interest, growth is exponential.
With simple interest, interest is always calculated on the original principal. With compound interest, it is calculated on the growing balance, so you earn more each period than the last.
Compounding frequency is how many times per year interest is calculated and added to the principal. Monthly compounding means 12 times per year, daily means 365. The higher the frequency, the greater the final amount.
The EAR is the true annual interest rate that accounts for compounding within a year. It is calculated as (1 + r/n)^n − 1 and allows comparison of financial products with different compounding frequencies.
The Rule of 72 is a quick approximation: divide 72 by the annual percentage rate to get the number of years it takes to double your money. At 6% per year, your investment doubles in approximately 72/6 = 12 years.
Absolutely. Adding even small monthly contributions harnesses both compound interest and the dollar-cost averaging effect. Over the long run, periodic deposits can exceed the contribution of interest on the initial principal alone.
No — like most basic financial calculators, this tool shows the nominal final amount. To obtain the real value, subtract the expected inflation rate from the return rate (real rate ≈ nominal rate − inflation).
Sources & References
[1]Brealey, R. A., Myers, S. C., Allen, F. — Principles of Corporate Finance. McGraw-Hill Education, 2020.↗
[2]Brigham, E. F., Houston, J. F. — Fundamentals of Financial Management. Cengage Learning, 2021.↗
This tool is provided for educational and informational purposes only. It does not constitute financial, tax or investment advice. Results do not account for inflation, taxes, fees or other factors specific to your situation.