How to Calculate Compound Interest

The base formula

For a one-time deposit, use A = P(1 + r / n)^(nt). P is principal, r is the annual rate, n is compounding periods per year, and t is time in years.

Manual example

If you start with $10,000 at 6% annual return compounded monthly for 10 years, the formula becomes 10,000 x (1 + 0.06 / 12)^120. The future value is about $18,194.

When to switch to a calculator

A calculator saves time when you add monthly deposits, compare multiple timelines, or want totals broken into contributions versus interest.

• You are adding recurring monthly contributions
• You want to compare annual versus monthly compounding
• You need future value, total deposits, and total interest in one view