Compound Interest Calculator
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How Compound Interest Grows Your Money
Compound interest is interest earned on both your original principal and on interest you've already accumulated. The more frequently interest compounds — daily vs monthly vs annually — the faster your balance grows for the same stated annual rate.
Why Starting Early Matters
Because each year's growth becomes part of the base that earns future growth, money invested early has far more time to compound. Starting ten years earlier, even with smaller contributions, often outperforms starting later with larger ones.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is earned only on the principal, while compound interest is earned on both the principal and previously accumulated interest.
Does compounding frequency matter?
Yes. More frequent compounding (daily or monthly vs annually) produces slightly higher returns for the same stated interest rate.