Compound Interest Calculator
Calculate how your investments grow over time with compound interest.
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Future Balance
Total Principal
Total Interest
Yearly Breakdown
| Year | Balance | Interest Earned | Total Contributions |
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Understanding Compound Interest
Compound interest is often called the "eighth wonder of the world". It is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. Essentially, it's "interest on interest".
How It Works
While simple interest is calculated only on the principal amount, compound interest makes your money grow faster because the interest you earn each year is added to your principal, forming a new base for the next interest calculation. This effect becomes more dramatic over longer periods of time.
The Power of Consistency
Even small monthly contributions can grow into significant sums over 10, 20, or 30 years due to the compounding effect. The key variables are the interest rate (rate of return) and time.