Compound Interest Calculator
Compounding interest is calculating interest on interest.
When you are saving money compounding means you are reinvesting your interest to earn additional interest payments. However, if you are borrowing and not making regular interest payments the amount you owe will increase quicker as interest becomes due on the existing loan amount plus interest accrued to date.
Our Compound Interest Calculator Has Two Modes.
1. Loan Interest
2. Savings Interest
As you will see, the total amount of compounded interest is the same. Therefore in the case of savings interest compounding works in your favour but in the case of loans interest compounding works against you.
Compound Interest Calculation Demo
Starting amount: £1,000
If interest compounding is not applied then the yearly profile would like this:
Compound interest therefore accounts for a difference of £9.27 in the example shown.