Compound Interest Calculator
See how your investments grow over time with the power of compound interest.
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Understanding Compound Interest
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It's often called "interest on interest" and is the reason investments can grow exponentially over time.
The formula for compound interest is: A = P(1 + r/n)^(nt)
- A = Final amount
- P = Initial principal
- r = Annual interest rate (decimal)
- n = Number of times interest is compounded per year
- t = Number of years
The "Rule of 72" is a quick way to estimate how long it takes to double your money: divide 72 by your annual interest rate. At 7% growth, your money roughly doubles every 10.3 years.