Calculate your investment growth with real-time updates and detailed visualizations
Compound interest is one of the most powerful concepts in finance. Unlike simple interest, which is calculated only on your initial investment, compound interest is calculated on both your principal and previously earned interest. This creates exponential growth over time.
When you invest money, you earn interest. With compound interest, that interest is added to your balance, and you then earn interest on the new total. This "interest on interest" effect accelerates your growth significantly over long periods.
Example: 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 just $10,000), giving you $11,449. Over 30 years, this grows to $76,123—more than 7x your initial investment!
The formula for compound interest is: A = P(1 + r/n)^(nt)
More frequent compounding means more growth. For example, $10,000 at 7% for 10 years:
While the difference seems small over 10 years, it compounds significantly over longer periods. Our calculator shows you the Effective Annual Rate (EAR) to see the true annual return when compounding frequency is considered.
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| Year | Starting Balance | Interest Earned | Ending Balance |
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