Compound Interest Calculator
See how your investments grow over time
Compound Interest Calculator
See how your investments grow over time with the power of compound interest. Enter your initial investment, monthly contribution, annual interest rate, and investment period to visualize the growth of your money.
How the Compound Interest Calculator Works
By entering your starting investment, regular contributions, and interest rate, the calculator projects your investment growth on a month-by-month basis. It accounts for the reinvestment of interest, showcasing exponential growth over time.
For example, starting with $10,000, contributing $500 monthly at an annual rate of 5% can significantly increase your net worth over the years through the effects of compound interest.
Investment Breakdown
The calculator provides a comprehensive breakdown of your investment journey, including:
- Initial Investment: The starting amount of your investment.
- Monthly Contribution: The additional funds you invest each month.
- Accumulated Balance: The total value of your investment after compounding interest.
- Interest Earned: The cumulative interest gained over the investment period.
Compound Interest FAQs
What is compound interest?
Compound interest is the process where earnings from an investment are reinvested to generate additional earnings, leading to exponential growth over time.
How does the calculator project investment growth?
The calculator applies the compound interest formula on a month-by-month basis, taking into account your initial investment, regular contributions, and annual interest rate to simulate growth.
Why is it important to understand compound interest?
Understanding compound interest is crucial as it demonstrates how investments can grow over time, significantly boosting the value of your assets.