Complete guide: Compound Interest
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Compound interest makes your earnings generate new earnings. Over time growth stops being linear and accelerates: that is why starting a few years earlier can be worth more than contributing twice as much later. Most of a long-term investment's growth arrives in the final years.
Compounding frequency matters: at the same annual rate, monthly compounding yields more than yearly compounding, because each period the interest joins the principal and starts earning sooner. With this calculator you can compare monthly, quarterly and yearly compounding and see the exact difference.
Don't forget inflation: capital that doubles in 20 years does not double your purchasing power if prices also rise. Turn on the inflation adjustment to see the real value of your investment in today's money. Example rates are illustrative: real returns vary and are not guaranteed.
How it works
- 1We compound at the chosen frequency (monthly, quarterly or yearly).
- 2Your contribution is added each compounding period.
- 3We split contributions from interest earned.
- 4If you enter inflation, we show the real value in today's money.
Frequently asked questions
What rate should I use?
Use a realistic, conservative annual return for your investment type.
What is compounding frequency?
It is how often interest is added to the principal. The more frequent, the higher the final result at the same annual rate.
What is the inflation-adjusted real value?
It is what you could buy today with the final balance: it discounts rising prices to show your investment's real purchasing power.