Compound Computation of Interest

A simple calculator for compound interest calculations. Enter three values, the fourth value will be calculated.
Example: 1000 with an interest rate of 10% is after 2 years 1210.

with an interest rate of % is after years

Compound interest describes the process of earning interest on a sum that has already accrued interest. With each step, a larger sum is added to the interest, and the total amount grows exponentially.

For negative interest rates, you can enter a minus sign along with the percentage. Example: 1000 at -1% interest will yield 970.299 after 3 years.
With negative interest rates, the total amount decreases inversely exponentially, as a smaller amount is credited with interest each time.

Interest means that after a certain period of time, a sum of money increases proportionally. This amount can be either a credit or a debt. Compound interest means that this increased amount of money grows again in the next step, but the basis for calculation is no longer the original amount, but the new amount including the accrued interest. Thus, more money earns interest, and the interest in this step is higher than in the previous one, assuming the interest rate remains constant. This continues as long as the interest rate is constant and the money remains. This is called exponential growth.
The calculation is done using the compound interest formula: K_n = K₀ * (1+p/100)ⁿ
K₀ is the initial capital, K_n is the final capital after n cycles, usually years. p is the interest factor, which is the interest rate in percent. So, for example, with 3 percent interest, b = 3.

The problem with exponential growth is that extremely high values are reached after a certain number of cycles. Now, the interest rate is generally chosen so that it takes quite some time to reach that point. Nevertheless, even this slow exponential growth requires measures to prevent absurdly high sums from occurring some time. One such measure is interest rate adjustments. The interest rate is not always the same and depends, among other things, on the inflation rate. This inflation also occurs with exponential growth. While the money is getting more, the value per money unit decreases. Ideally, these two exponential factors, compound interest and inflation, balance each other out.