Compound Interest Calculator
Free compound interest calculator. Simulate your investment growth with an initial deposit, regular contributions, interest rate, and compounding frequency. Visualize your wealth accumulation with charts.
Simulate the growth of your investment with compound interest and periodic contributions.
What Is Compound Interest?
Compound interest is interest calculated not only on the initial principal but also on the accumulated interest from previous periods. Often called "the eighth wonder of the world," it allows your money to grow exponentially over time.
Compound Interest Formula
A = P(1 + r/n)^(nt), where A is the final amount, P is the initial principal, r is the annual interest rate, n is the compounding frequency per year, and t is the time in years. With regular contributions, the formula adds: PMT x [((1 + r/n)^(nt) - 1) / (r/n)].
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus any accumulated interest, creating exponential growth over time.
How often should interest be compounded?
It depends on the financial product. Savings accounts typically compound daily or monthly. CDs may compound daily, monthly, or quarterly. The more frequently interest compounds, the faster your money grows.
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