The compound interest calculator is a tool that visually shows how your assets grow using the power of time. Enter the following items in order:
Enter the amount you want to invest initially. This is the initial capital you put in when opening an account or starting an investment.
Enter the amount you want to invest monthly or yearly. Regular additional deposits can maximize the compound interest effect.
This is a key factor that determines your return. Select the annual interest rate (%) and how often interest is applied.
Enter how long you plan to invest. Since compound interest grows exponentially over time, a longer period means greater asset growth.
After entering all items, click the calculate button to see expected returns, accumulated interest, and year-by-year growth graph.
Compound interest means that interest is earned not only on the principal investment but also on the accumulated interest. In simple terms, it's the concept of **interest earning interest**.
The compound interest formula is as follows:
A = P × (1 + r/n)^(nt)
A = Final Amount (Future Value)
P = Initial Investment
r = Annual Interest Rate (as decimal, e.g., 5% → 0.05)
n = Number of times interest is compounded per year
t = Investment Period (years)
If you invest $5,000 at 7% annual return for 10 years:
After 10 years, $5,000 grows to approximately $9,835!
✅ Just a 10-year difference creates more than double the result!
✅ Following these basics will maximize your compound interest effect!
| Period | Simple Interest ($5,000, 5%) | Compound Interest ($5,000, 5%) |
|---|---|---|
| 5 years | $6250 | $6381 |
| 10 years | $7500 | $8144 |
| 20 years | $10000 | $13266 |
| 30 years | $12500 | $21610 |
✅ Compound interest creates a much larger difference than simple interest over the long term.