See the power of compounding — calculate how your investment or savings grows over time with compound interest.
Investment Details
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Added annually. Set 0 for none.
%
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1yr50yrs
Future Value
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Total after your investment period
Total Interest Earned
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Initial Investment
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Total Contributions
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Interest Earned
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Return on Investment
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Starting Amount
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Total Contributions
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Interest Earned
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Future Value
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Effective Annual Rate
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About Compound Interest
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. This "interest on interest" effect causes wealth to grow exponentially over time — often called the 8th wonder of the world. The more frequently interest compounds (daily vs annually), the faster your money grows.
FAQ
What is compound interest?
Compound interest means your interest earns interest. If you invest $10,000 at 7% annually, after year 1 you have $10,700. In year 2, you earn 7% on $10,700 (not $10,000), earning $749 — more than the first year.
How is compound interest calculated?
FV = P(1 + r/n)^(nt) + PMT × [(1+r/n)^(nt) − 1] / (r/n), where P = principal, r = annual rate, n = compounding periods, t = time, PMT = regular contribution.
Does compounding frequency matter much?
Yes, but less than most people think. The difference between monthly and daily compounding on $10,000 at 7% for 20 years is only about $130. The rate and time period matter far more.
When should I start investing?
As soon as possible. Starting at 25 instead of 35 with $1,200/year at 7% grows to $240K vs $113K — more than double for just 10 extra years, demonstrating the power of time with compounding.