Compound interest occurs when the accrued interest on a sum is added to the principle after each period. This is the most common method of paying interest on savings accounts. The basic formula for compound interest is show below.
Key Terms to Know for Compound Interest
- FV = Future Value
- PV = Present Value
- k = interest rate as decimal
- n = number of periods
Calculate Compound Interest Future Amount
This calculator will calculate the future value of a present amount using compounding interest.
A few Sample Test Questions
What will 10,000 be worth in 10 years if it earns 5% interest that is compounded annually?
If you put $600 into a savings account that accrues 2.5% annual interest, what will it be worth in 25 years?