Compound Interest Calculator: Formula & Investment Examples

Compound interest means adding earned interest back to the principal so the next period earns interest on the new total. Your money grows exponentially — the “snowball effect.”

Compound Interest Formula

A = P × (1 + r ÷ n)^(n × t)

• A = final amount
• P = initial principal
• r = annual interest rate (decimal, e.g., 5% = 0.05)
• n = compounding periods per year
• t = number of years

Example

Invest 100,000 THB at 5% per year, compounded annually for 10 years:

• A = 100,000 × (1 + 0.05)^10 = 100,000 × 1.6289 ≈ 162,889 THB

Interest earned ≈ 62,889 THB — more than simple interest (50,000 THB) because interest earns interest.

More Frequent Compounding = More Growth

• Annual: 5% per year
• Monthly: n = 12 → slightly higher return
• Daily: n = 365 → highest return

Rule of 72

Estimate when your money doubles: 72 ÷ interest rate (%)

Example: 6% rate → 72 ÷ 6 = 12 years to double.

Where It Applies

• Fixed deposits and savings certificates
• Mutual funds and dividend stocks
• Credit card debt (compounded daily — be careful)

Try the compound interest calculator to plan your finances.