Compound Interest Calculator
Investment Growth Projection
About Compound Interest
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. It causes wealth to grow faster because you earn returns on both your original money and the returns you receive over time.
Compound Interest Formula:
A = P(1 + r/n)nt
- A = Future value of investment
- P = Principal investment amount
- r = Annual interest rate (decimal)
- n = Number of times interest is compounded per year
- t = Time money is invested for (years)
Key Benefits of Compounding:
- Your money grows exponentially over time
- Small regular contributions make a big difference long-term
- More frequent compounding accelerates growth
- Starting early gives your money more time to grow
Compound Interest Examples:
| Initial Investment | Monthly Contribution | Rate | Years | Final Value |
|---|---|---|---|---|
| $10,000 | $100 | 7% | 30 | $167,504 |
| $5,000 | $500 | 8% | 20 | $296,537 |
| $0 | $200 | 6% | 40 | $398,042 |