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Compound Interest Calculator

Project how a starting balance can grow when interest is added repeatedly.

CALCULATOR

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About this tool

Compound interest describes growth where interest is added to a balance and later growth is calculated on the larger balance. This calculator lets you see the effect of the starting amount, annual rate, time period and compounding frequency.

How it works

Compounding can make a noticeable difference over long periods because earlier growth remains in the balance. Real savings and investments may have variable rates, taxes, fees and deposits or withdrawals, so treat the result as a simplified projection.

Formula or method

Future value = P × (1 + r/n)ⁿᵗ, where P is principal, r is annual rate, n is compounding periods per year, and t is years.

Useful for

Savings projections
Investment illustrations
Comparing compounding periods

Related tools

Worked example

Suppose ₦100,000 earns 5% annually for 5 years, compounded once per year, with no extra deposits or withdrawals. The projected ending balance includes interest earned on earlier interest. More frequent compounding can change the result.

Assumptions to check

The projection assumes the rate remains constant and excludes taxes, fees, inflation and investment risk.

Important limitation

The calculation assumes a fixed rate and regular compounding. It does not model taxes, fees, inflation, deposits, withdrawals or changing market returns.

Quick question

Does it guarantee investment growth?

No. It is a fixed-rate mathematical projection. Real returns can vary and may include fees, taxes and losses.

Use the result as a starting point

Check the inputs and assumptions before relying on the result. FreeTools Hub is designed for general calculations and education; it does not replace professional financial, tax, legal or medical advice.