$0 0% Growth
$0 0% Growth
Records key data on annual investment growth.
Unlike the charts, this table provides precise figures, helping you track changes year by year and monitor your investment plan.
| Year | Principal | Deposit | Interest | Final Amount |
|---|
Shows the overall growth of your investment over time.
Each point on the line represents your final amount for that year, making it easy to visualize the impact of compounding.
The bar chart breaks down the annual growth into distinct components:
Principal, Regular Contributions, and Interest/Profit — clearly showing how compounding drives asset growth.
Assume you invested $10,000 in an S&P 500 ETF 10 years ago, and its value has now grown to $28,000.
How to Use the Compound Interest Calculator:
Result: The annual return is approximately 10.75%
You invest $200 per month with an assumed annual return of 8%.
How to Use the Compound Interest Calculator:
Result: After 20 years, the final amount will be approximately $118,000
You plan to buy a home worth $300,000 in 8 years and need to save $50,000 for a down payment. Assuming a 6% return, how much should you save each month?
How to Use the Compound Interest Calculator:
Result: You need to save approximately $485 per month
You are currently 35 years old and want to save $500,000 by the time you retire at 65. Assuming a 5% return, how much do you need to invest per month?
How to Use the Compound Interest Calculator:
Result: You need to save approximately $480 per month
This calculator is simple and easy to use. Just input your principal, annual rate, investment duration, and compounding frequency to quickly estimate your future total amount. You can also simulate regular contributions and see the breakdown of principal vs. interest. Additionally, it allows reverse calculations to determine the time needed to reach your goal. With clear charts, you can visually understand how your money grows. A practical financial planning tool!
Compound interest is a method of calculating interest that builds upon itself. Unlike simple interest, it calculates interest not only on the principal but also on accumulated interest, creating a snowball effect over time.
The impact of compounding increases with time and frequency. The more frequent the compounding (e.g., monthly or daily), the faster your money grows. The longer the investment period, the greater the accumulated effect. Over time, compound interest leads to exponential growth.
Even with a modest rate of return, long-term investing with compounding can result in significant wealth accumulation. This is why 'time is money' is especially true in financial planning.
Therefore, compound interest is one of the most powerful tools in investing. Starting early and staying consistent can help you unlock its full potential and steadily grow your wealth.
A = P × (1 + r)n
| Term | Definition |
|---|---|
| Initial Investment (Principal) | The amount of money you initially invest. It serves as the foundation for compound growth and significantly affects future value. |
| Annualized Return (%) | The annualized return is the percentage difference between investment earnings and cost. It's a key metric to assess profitability and compare investment options. |
| Investment Duration | The period over which interest is calculated (e.g., yearly, monthly, or daily). |
| Compounding Frequency | How often interest is calculated and added to the principal. Common frequencies include yearly, semiannually, quarterly, and monthly. |
| Final Amount | The total amount your investment grows into over time, including both principal and accumulated interest. |
