## Compound Interest Calculator

Compound interest is interest that is paid on both the principal and also on any interest earned and accumulated.

The formula used to calculate compound interest is:

M = P ( 1 + i )^{n}

M is the final amount including the principal.

P is the principal amount.

i is the rate of interest per year.

n is the number of years invested.

Applying the Formula

Let's say that I have $1000.00 to invest for 3 years at rate of 5% compound interest.

M = 1000 (1 + 0.05)^{3} = $1157.63.

My $1000.00, after 3 years, is worth $1157.63.