Compound Interest Calculator
Calculate how your investments grow with compound interest. See the power of compounding with detailed projections and year-by-year breakdown of your investment growth.
Investment Growth Over Time
Year-by-Year Breakdown
| Year | Starting Balance | Interest Earned | Ending Balance |
|---|
Investment Growth Strategies
Start Early
The power of compound interest is most effective when you start investing early. Time is your greatest asset in building wealth.
Consistent Contributions
Regular monthly contributions can significantly boost your investment growth through dollar-cost averaging.
Higher Returns
Even a small increase in annual returns can dramatically impact your final amount due to compounding effects.
Long-Term Focus
Compound interest works best over longer time periods. Stay invested and let time work in your favor.
Understanding Compound Interest
What is Compound Interest?
Compound interest is the interest calculated on the initial principal and also on the accumulated interest from previous periods. It's often called "interest on interest" and can significantly boost your investment returns over time.
The Formula
A = P(1 + r/n)^(nt)
- A = Final amount
- P = Principal (initial investment)
- r = Annual interest rate (decimal)
- n = Number of times interest compounds per year
- t = Time in years
Why It Matters
The earlier you start investing and the longer you stay invested, the more powerful compound interest becomes. This is why financial experts often say "time in the market beats timing the market."