See how your investment grows over time with the power of compounding.
Principal Amount
Total Interest
Future Value
Frequently Asked Questions (FAQ)
Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. It's often referred to as "interest on interest" and can significantly boost investment growth over time.
The formula for compound interest is: A = P (1 + r/n)nt, where:
A = the future value of the investment/loan, including interest
P = the principal investment amount
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal and also on the accumulated interest of previous periods. This "interest on interest" effect leads to much faster growth of money.