Compound Interest Calculator
Convert interest rates between different compounding periods. Enter the input rate and select input/output compounding frequencies to get the equivalent rate.
6.16778%
6% compound Monthly (APR) is equivalent to 6.16778% compound Annually (APY).
Input:
6% Monthly
=
Output:
6.16778%
Annually
Financial Calculators
What is Compound Interest?
Interest is the cost of using borrowed money. Simple interest is earned only on the principal. Compound interest is earned on both the principal and accumulated interest — making money grow faster over time.
Simple Interest Example
$100 × 10% × 2 years = $20 interest
Compound Interest Example
Year 1: $100 × 10% = $10 interest → Balance $110
Year 2: $110 × 10% = $11 interest → Balance $121
Total Interest: $21 (vs $20 simple interest)
Year 2: $110 × 10% = $11 interest → Balance $121
Total Interest: $21 (vs $20 simple interest)
Compound Interest Formula
A = P × (1 + r/n)^(n×t)
Where: A = final amount, P = principal, r = annual rate, n = compounds/year, t = years
APR ↔ APY Conversion
APY = (1 + APR/n)^n − 1
APR = n × ((1 + APY)^(1/n) − 1)
Equivalent Rate Comparison (6% Input)
| Compounding Frequency | Equivalent Annual Rate | Periods/Year |
|---|
Why Compounding Frequency Matters
The more frequently interest is compounded, the higher the effective annual yield. Daily compounding produces slightly more interest than monthly, which produces more than quarterly. For long-term investments this difference compounds significantly over decades.
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