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Compound interest is the interest earned on both the initial principal and the accumulated interest from previous periods. Our compound interest calculator helps you understand how your investments can grow over time through the power of compounding, making it an essential tool for long-term financial planning.
Enter your initial investment amount, expected interest rate, time period, and compounding frequency. The calculator uses the compound interest formula A = P(1 + r/n)^(nt) to show your investment's future value. You can also add regular contributions to see how systematic investing impacts your returns.
Albert Einstein called compound interest the "eighth wonder of the world." Starting early and staying consistent can dramatically increase your wealth. Even small regular contributions, when compounded over long periods, can grow into substantial amounts due to the exponential nature of compounding.
Start investing as early as possible, maintain consistency with regular contributions, look for higher interest rates, choose more frequent compounding, and reinvest your earnings. The key to building wealth through compounding is time and patience.
Simple interest is calculated only on the principal amount, while compound interest is calculated on both principal and accumulated interest, leading to exponential growth.
More frequent compounding (daily vs. annually) results in higher returns because interest is calculated and added more often.
Yes, regular contributions significantly boost your final amount through dollar-cost averaging and additional compounding periods.