This is a tool that calculates the total compound interest and resulting final amount when, beginning with an initial amount, interest is compounded at a specified frequency for a given amount of time.

For this calculation, it is necessary to supply the following information:

• The initial amount.
• The term during which interest is compounded, in years, months, weeks or days.
• The annual interest rate, which can be entered as either a nominal (default) or effective rate. If it is a nominal annual rate then it is used together with the compounding frequency to determine the interest rate applied per compounding period. An effective annual rate, on the other hand, is a rate that has already factored in the periodic compounding to give a rate equivalent to interest being compounded annually, and thus does not need compounding frequency for the tool calculation. On the tool form, the rate is usually expressed in percentage terms (unless the formatting is explicitly set to express it as a decimal).
• The compounding frequency, which specifies how often interest is compounded per year. The possible values for the compounding frequency are annual (default), semiannual, quarterly, monthly, weekly, daily or continuous. The compounding frequency is only important if a nominal annual interest rate is given, since an effective annual rate has already taken the periodic compounding into account.

Associated tool link: http://www.coggit.com/tools/compound_interest_calculator.html