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Compound Interest Calculator

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Concept:

Compound interest is interest that is earned not only on the original principal but on any previously earned interest as well. If P dollars are invested at r% annually (where r is expressed as a decimal number), with the interest compounded n times per year, then in t years the investment has a future value given by F = P(1 + r/n)^nt. If the interest is compounded continuously, then the future value is given by F = Pe^rt.

First, select the quantity you wish to calculate, and enter values for the other three quantities.

Present Value P = (Range 0 to 1,000,000)

Future value F = (Range 0 to 2,147,483,647)

Annual interest rate r =

Time in years t =

Compounding Frequency =

INSTRUCTIONS

First, select the quantity to be solved for, any one of Future value, Present value, interest rate, or time, then set values for the other three parameters by using the sliders or by typing decimal numbers into the text fields.

Next, choose a compounding frequency. Finally, click the button to compute the unknown value.

The interest rate should be converted from a percent and entered as a decimal number.

The time parameter should be in years, so months, days, and weeks should be converted to years by dividing by 12, 52, or 365 respectively; for instance,

3 years + 8 months = 3 years + 8/12 years = 3 years + 0.66667 years = 3.66667 years

6 weeks + 5 days = 6/52 years + 5/365 years = 0.11538 years + 0.01370 years = 0.12908 years

Compound Interest Calculator

Concept:

INSTRUCTIONS

EXPLORATIONS

PRACTICE QUESTIONS