Compound Interest Calculator
Compute compound interest and maturity value with yearly, half-yearly, quarterly or monthly compounding — the workhorse formula behind Time Value of Money questions in CA Foundation and investment maths across the course.
A = P × (1 + r/m)^(m×t); compound interest = A − P; effective annual rate = (1 + r/m)^m − 1. More frequent compounding raises the effective rate above the nominal rate.
How it works
- Enter principal, annual rate, time period and compounding frequency.
- The calculator applies A = P(1 + r/m)^(m·t) with m compounding periods per year.
- Results show maturity amount, total interest earned, and the effective annual rate.
Where this shows up in the CA exam
CA Foundation Paper 3 tests exactly this: converting nominal to effective rates, comparing compounding frequencies, and finding unknowns (rate, time or principal). Play with the frequency input to internalise why quarterly beats annual compounding at the same nominal rate.
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Talk to usWhat is the compound interest formula?
A = P(1 + r/m)^(m×t), where P is principal, r the annual rate as a decimal, m the compounding periods per year and t the time in years. Compound interest is A − P.
What is effective annual rate?
The single yearly rate that produces the same growth as the nominal rate with intra-year compounding: EAR = (1 + r/m)^m − 1. A 12% nominal rate compounded monthly has an EAR of about 12.68%.
How is compound interest different from simple interest?
Simple interest accrues only on the original principal (SI = P×r×t); compound interest accrues on principal plus accumulated interest, so the gap between the two widens with time and frequency.