Compound Interest Calculator
Visualize the power of compound interest. Calculate investment growth over time for savings, 401(k)s, and crypto.
Σ The Formula
Real World Examples
# About This Calculator
The Compound Interest Calculator demonstrates the incredible potential of exponential growth. Often called the "eighth wonder of the world," compound interest allows your money to earn interest on itself, accelerating wealth accumulation over long periods. It is the fundamental principle behind retirement savings, stock market investing, and even inflation.
How Compound Interest Works
- P (Principal): Your starting investment.
- r (Annual Rate): The expected return (decimal).
- n (Frequency): How often interest is added (e.g., 12 for monthly).
- t (Time): How long the money grows (years).
Real-World Examples
The Snowball Effect
Imagine a snowball rolling down a hill. It starts small, but as it gathers more snow (interest), it grows larger and faster. In investing, the "snow" is your interest earning more interest.
Debt Danger
Compound interest works both ways. Credit card debt compounds daily, meaning if you don't pay it off, your debt grows exponentially.
Frequency Matters
The more frequently interest compounds, the more money you make. Finding an account that compounds Daily is better than Monthly, though the difference is usually small for short periods. Over 30 years, however, those small differences add up!
How To Use
- Enter your **Principal** (Initial Investment).
- Enter the expected **Interest Rate** (Annual %).
- Enter the **Time Period** in years.
- Select **Compounding Frequency** (Monthly is standard for most savings).
- Click **Calculate** to see your future balance.