📈 Compound Interest Calculator
Regular investment simulation, visualize compound growth
Parameters
Frequency Comparison
Annually
$682,561
Int: $492,561
Semi-Annually
$688,966
Int: $498,966
Quarterly
$692,365
Int: $502,365
Monthly
$694,709
Int: $504,709
Daily
$697,693
Int: $507,693
DCA vs Lump Sum
Lump Sum
$1,542,135
All in $190,000
DCA
$694,709
$500/mo × 360 periods
Compound Growth Curve
📐 How It Works
Future Value Formula (FV)
FV = PV × (1 + r/n)^(n×t) + PMT × ((1 + r/n)^(n×t) - 1) / (r/n)
- PV = Initial Principal
- PMT = Periodic Contribution
- r = Annual Rate
- n = Periods per Year
- t = Years
Frequency Impact
Higher frequency = faster compounding. 7% APR, $1,000/month, 30 years: Annually $1,212,877, Monthly $1,227,087, Daily $1,232,095. Daily beats Annually by ~$19,218.
❓ FAQ
What is compound interest?＋
Compound interest is interest earned on both your original principal and accumulated interest. It's often called 'interest on interest' and is key to long-term wealth building.
How often should interest be compounded?＋
More frequent compounding (daily vs annually) yields slightly higher returns. Monthly compounding is common for most investment accounts.
What is the Rule of 72?＋
The Rule of 72 estimates how long it takes money to double: Years ≈ 72 ÷ Annual Return (%). At 7%, money doubles in ~10.3 years.
How much difference does starting early make?＋
Starting 10 years earlier can more than double your final balance. A 25-year-old saving $500/month at 7% will have ~$1.2M by 65; starting at 35 yields only ~$610K.
Should I invest a lump sum or dollar cost average?＋
Lump sum historically outperforms DCA about 2/3 of the time. But DCA reduces emotional stress and is easier for most people to maintain.
How do fees affect compound growth?＋
Even a 1% annual fee can reduce your final balance by 20-30% over 30 years. Low-cost index funds are recommended for long-term investing.
What is the difference between nominal and real return?＋
Nominal return is before inflation. Real return accounts for inflation. At 7% nominal with 3% inflation, your real return is ~4%.
Can I rely on compound interest for retirement?＋
Compound interest is a powerful tool but should be part of a diversified retirement strategy including tax-advantaged accounts and appropriate asset allocation.
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