Calculate how your investments grow over time with compound interest. Plan for your financial future with this easy-to-use calculator.
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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 makes your money grow faster compared to simple interest.
Simple interest is calculated only on the initial principal, while compound interest is calculated on the principal plus any interest accumulated in previous periods. This makes compound interest much more powerful for long-term investments.
The more frequently interest is compounded (daily vs. monthly vs. annually), the more your investment will grow. This is because interest is calculated and added to your principal more often, allowing you to earn interest on your interest sooner.
Albert Einstein reportedly called compound interest the "eighth wonder of the world" because of its incredible ability to generate wealth over time. The power of compound interest becomes more apparent the longer your investment horizon is.