Compound Interest Calculator

How Compound Interest Works

Compound interest is the interest you earn on both your original investment and on the interest you've already earned. It's often called the "eighth wonder of the world" because of its powerful effect on growing wealth over time.

Unlike simple interest, which only earns returns on the principal amount, compound interest accelerates your wealth growth by reinvesting your earnings. This creates a snowball effect where your money grows exponentially rather than linearly.

Key Factors That Affect Your Growth

• Time: The longer you invest, the more powerful compound interest becomes
• Interest Rate: Even small differences in rates create large differences over time
• Compound Frequency: More frequent compounding leads to faster growth
• Regular Contributions: Consistent investing dramatically increases your final balance