Compound Interest Calculator - Growth Over Time
Use our Compound Interest Calculator to input your principal, interest rate, and compounding frequency to see investment growth. Assess compound interest's effect on your financial goals.
Calculate investment growth with compound interest, including regular contributions and detailed breakdowns.
Investment Growth Analysis
Final Amount
Total Interest Earned
Total Contributions
Effective Annual Rate
Understanding Compound Interest
- Interest earned on both principal and accumulated interest
- More frequent compounding yields higher returns
- Time is a crucial factor in compound growth
- Regular contributions accelerate growth
- The power of compound interest increases over time
Investment Tips
- Start investing early to maximize compound growth
- Reinvest dividends when possible
- Consider tax-advantaged accounts
- Maintain a diversified portfolio
- Stay invested for the long term
Frequently Asked Questions
Compound interest is interest calculated on both the initial principal and all accumulated interest from previous periods. Unlike simple interest (which only calculates on the principal), compound interest grows exponentially over time because you earn "interest on interest."
The more frequently interest compounds, the higher your returns. Daily compounding yields slightly more than monthly, which yields more than annual compounding. For example, a 5% annual rate compounded daily gives an effective annual rate of about 5.13%, versus exactly 5% with annual compounding.
Regular contributions significantly accelerate investment growth by increasing the principal that earns compound interest. Even small, consistent contributions can result in substantial growth over time due to the compounding effect on each addition.
