See how your money grows with compound interest. Compare different compounding frequencies with a year-by-year growth breakdown.
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Quick answers to common questions
Compound interest is interest calculated on both the principal and the accumulated interest from previous periods. Unlike simple interest (calculated only on principal), compound interest grows exponentially over time.
A = P(1 + r/n)^(nt), where A = final amount, P = principal, r = annual interest rate (decimal), n = number of times compounded per year, t = time in years.
More frequent compounding means higher returns. Daily compounding > monthly > quarterly > annually. However, the difference between daily and monthly compounding is relatively small for most interest rates.
Rule of 72 is a quick way to estimate how long it takes to double your money: divide 72 by the annual interest rate. At 8% p.a., your money doubles in 72/8 = 9 years.
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A = P × (1 + r/n)^(n×t)
CI = A − PA is the final amount, P is the principal, r is the annual interest rate, n is compounding frequency per year, and t is time in years. Compound interest (CI) is the final amount minus the principal.
| Symbol | Meaning |
|---|---|
| A | Final amount |
| P | Principal |
| r | Annual interest rate (decimal) |
| n | Compounding periods per year |
| t | Time in years |
| CI | Compound interest earned (A − P) |