## Compound Interest Calculator

 Principal Months 1 = .08 2 = .17 3 = .25 4 = .33 5 = .42 6 = .50 7 = .58 8 = .67 9 = .75 10 = .83 11 = .92 Step 1: Enter the Principal (the amount of money borrowed or to be lent). Step 2: Enter the Rate (the annual percentage of interest). Step 3: Enter the length of time in years the money will be borrowed or lent. Rate Years Amount Interest

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.

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