---
title: "How to Calculate Compound Interest — Formula, Examples, Daily vs Monthly vs Annual"
description: "Learn the compound interest formula A = P(1 + r/n)^nt with step-by-step examples. Covers daily, monthly, and annual compounding and how interest rates differ by country."
url: "https://worldcalculators.org/learning/how-to/compound-interest/"
canonical: "https://worldcalculators.org/learning/how-to/compound-interest/"
---

# How to Calculate Compound Interest

Learn the compound interest formula A = P(1 + r/n)^nt with step-by-step examples. Covers daily, monthly, and annual compounding and how interest rates differ by country.

## Quick answer

Formula: A = P(1 + r/n)^(nt) — where P = principal, r = annual rate (as a decimal), n = compounding periods per year, t = years. Example: $5,000 at 4% compounded monthly for 5 years: A = 5,000 × (1 + 0.04/12)^60 = 5,000 × 1.22099 = $6,104.98 . Interest earned: $1,104.98.

## The Compound Interest Formula Explained

To find only the interest earned: Interest = A − P
P = your starting amount. r = annual rate ÷ 100 (e.g. 6% → 0.06). n = 12 for monthly, 365 for daily, 4 for quarterly, 1 for annually. t = number of years.

Source: https://worldcalculators.org/learning/how-to/compound-interest/
Markdown mirror of the HTML page. Prefer this URL for RAG; the interactive calculator still lives on the HTML page.