Understanding Compound Interest
Unlike simple interest, which is calculated solely on original principal, compound interest calculates interest on both original principal AND accumulated interest from previous periods. This exponential growth accelerates long-term wealth building.
Use our Compound Interest Calculator Tool to project long-term investment growth.
The Compound Interest Formula
Formula: `A = P * (1 + r/n)^(nt)`
- A: Final Projected Balance
- P: Principal Deposit Amount
- r: Annual Interest Rate (decimal)
- n: Compounding frequency per year
- t: Time duration in years
Projecting Your Investment Growth
- Open the Compound Interest Calculator.
- Input principal deposit, annual interest rate, and duration in years.
- Click "Calculate Investment Growth" to view final balance and total interest earned.