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How to calculate compound interest

Compound interest on a single deposit needs four of the five financial keys: n, i, PV and FV.

Problem

You invest $10,000 at 8% a year, compounded yearly, for 10 years. What is it worth at the end?

Keystrokes

  1. fFINx≷y
    0.00

    Start clean.

  2. 10n
    10.00

    Ten yearly periods.

  3. 8i
    8.00

    8% per period.

  4. 10000CHSPV
    −10,000.00

    The deposit, negative because it leaves your pocket.

  5. FV
    21,589.25

    What you get back at the end.

Answer

The $10,000 grows to $21,589.25, more than double.

Why it works

FV is PV × (1 + i)ⁿ, and the calculator does the arithmetic for you. The sign change shows the direction: you pay in today and receive back later.

Monthly compounding

Use monthly periods: 10g12×n and 8g12÷i, then the same PV and FV. More frequent compounding gives a slightly larger result, because interest starts earning interest sooner.

Questions

How do I add regular deposits?

Store them in PMT, also negative. See the guide on saving every month.

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