Compound Interest Calculator - Daily, Monthly, Yearly ...

The concept of compound interest, or 'interest on interest', is that accumulated interest is added back onto your principal sum, with future interest ... Popupcalculator Copyalinktothispage Printthispage Emailalinktothispage Scrolluptoform Whatdoesthismean? 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Regularcontributions Deposits Withdrawals Depositamount $ monthly quarterly half-yearly yearly Depositsmadeatwhatpointinperiod? Beginning End Increasedepositsyearlywithinflation? Annualinflationrate? Calculate Useourcompoundinterestcalculatortoseehowthepowerofcompoundinterestcangrowyoursavingsorinvestmentsovertime. Advertisements Likethis?Pleaseshare Pleasehelpmespreadthewordbysharingthiswithfriendsoronyourwebsite/blog.Thankyou. Link Disclaimer:Whilsteveryefforthasbeenmadeinbuildingthistool,wearenottobeheld liableforanydamagesormonetarylossesarisingoutoforinconnectionwiththeuseofit.Fulldisclaimer. Thistoolisherepurelyasaservicetoyou,pleaseuseitatyourownrisk. Onthispage: Howtocalculatecompoundinterest Usingourinterestcalculator Whatiscompoundinterest? Compoundinterestexample Compoundingwithadditionaldeposits Examplechart Frequentlyaskedquestions Howtocalculatecompoundinterest Compoundinterestiscalculatedusingthecompoundinterestformula.Tocalculateyourfuturevalue,multiplyyourinitialbalanceby oneplustheannualinterestrateraisedtothepowerofthenumberofcompoundperiods.Subtracttheinitialbalanceifyouwantjustthecompoundedinterest figure. A=P(1+r/n)(nt) Where: A=thefuturevalueoftheinvestmentorloan P=theprincipalinvestmentorloanamount r=theinterestrate(decimal) n=thenumberoftimesthatinterestiscompoundedperperiod t=thenumberofperiodsthemoneyisinvestedfor Youcanuseacompoundinterestcalculatortocreateaprojectionofhowmuchyoursavingsorinvestmentsmightgrowoveraperiodoftimeusingthe powerofcompoundinterest.Wehaveaseparatearticlediscussingvariationsofthecompoundinterestformula,shouldyoubeinterested. Usingourinterestcalculator Ourinterestcalculatorgivesyouafuturebalanceandaprojectedmonthlyandyearlybreakdownforthetimeperiod.Here'showtouseit: Enteraninitialbalancefigure Enterapercentageinterestrate-eitheryearly,monthly,weeklyordaily Enteranumberofyearsormonths,oracombinationofboth,forthecalculation Selectyourcompoundinginterval(daily,monthly,quarterlyoryearlycompounding) Includeanyregularmonthly,quarterlyoryearlydepositsorwithdrawals Youcanusetheresultsasaguidetocreateasavingstrategytomaximiseyourfuturewealth. Whatiscompoundinterest? Theconceptofcompoundinterest,or'interestoninterest',isthat accumulatedinterestisaddedbackontoyourprincipalsum,withfutureinterestcalculationsbeingcarriedoutonthetotalofboththeoriginalprincipalandalready-accrued interest.AccordingtoanarticlepublishedintheJournalofEconomicEducationin2016,lessthanone-thirdoftheU.S.populationcomprehendshowcompound interestfundamentallyworks1. Theideaofcompoundinteresthasbeenaroundalongtime,withlimitedevidencesuggestingancientcivilizationsmayevenhaveknownaboutit.AttheLouvreinParis,thereexistsaclaytabletfromBabylon,possibly datingfrombetween2000to1700B.C.,whichappearstoshowacompoundinterestproblem.However,itseemslikelythatitwasn'tuntilmedievaltimesthat mathematiciansbegantoanalysecompoundinterestfully2. Compoundinterestexample Let'slookatasimpleexampleandsayyouhave$10,000inyoursavingsaccount,earning5%interestperyear.Yourfirst10yearsmightlooklikethis: Year InterestCalculation InterestEarned EndBalance Year1 $10,000x5% $500 $10,500 Year2 $10,500x5% $525 $11,025 Year3 $11,025x5% $551.25 $11,576.25 Year4 $11,576.25x5% $578.81 $12,155.06 Year5 $12,155.06x5% $607.75 $12,762.82 Year6 $12,762.82x5% $638.14 $13,400.96 Year7 $13,400.96x5% $670.05 $14,071 Year8 $14,071x5% $703.55 $14,774.55 Year9 $14,774.55x5% $738.73 $15,513.28 Year10 $15,513.28x5% $775.66 $16,288.95 Let'slookathowwecancalculatetheyear10figureusingourformula.Rememberthatourinitialsavingsbalanceis$10,000,earning5%interestperyear. Ourcompoundinginthiscaseisyearly(interestcompoundedonceperyear). Ourformula:A=P(1+r/n)(nt) P=10000. r=5/100=0.05(decimal). n=1. t=10. Ifweplugthosefiguresintotheformula,wegetthefollowing: A=10000(1+0.05/1)(1×10)=16288.95 So,thebalanceafter10yearsis$16,288.95.Ourtotalinterestearnedistherefore$6,288.95. Compoundingwithadditionaldeposits Ifyougetintoapatternofmakingregulardepositsintoyoursavings,thepowerofcompoundinterestcanhelpyouachieveevenhigherinterestrewards. Lookingbackattheexampleabove,ifweweretocontributeanadditional$100permonthintoourinvestment, ourbalanceafter10yearswouldhittheheightsof$31,725,withinterestof$9,725ontotaldepositsof$22,000. Advertisement Compoundinterestchart Thepowerofcompoundinterestreallybecomesapparentwhenyoulookatachartoflong-termgrowth.Here'sanexamplechart.Youinvestyourprofitmarginfromasaleofanitem($1,000).We'llusealonger compoundinginvestmentperiod(20years)at10%peryear,tokeepthesumsimple.Aswecomparethebenefitsofcompoundinterestversusstandardinterest andnointerestatall,it'scleartoseehowcompoundinterestcanreallygiveaboosttoyoursavings. FAQ Somefrequentlyaskedquestionsaboutcalculatinginterestandmysavingscalculators. Whenisinterestcompounded? Withsavingsaccounts,interestcanbecompoundedateitherthestartortheendofthecompoundingperiod.Ifadditionaldepositsorwithdrawalsareincludedinyour calculation,youhavetheoptiontoincludethemeitheratthestartorendofeachperiod. Daily,monthlyoryearlyinterestcompounding Ourcompoundinterestcalculatorincludesoptionsfor: dailycompounding monthlycompounding quarterlycompounding halfyearlyandyearlycompounding monthly,quarterlyandyearlydepositsandwithdrawals negativeinterestrates inflationincreases Yoursavingsaccountmayvaryonthis,soyoumaywishtocheckwithyourbankorfinancialinstitutiontofindoutwhichfrequencytheycompoundyourinterestat.Ourcompoundinterestcalculatorallowsyoutoenter anegativeinterestrate,shouldyouwish.Ifyouneedtoworkouttheinterestdueonaloan,youcanusetheloancalculator. Advertisement Whatistheeffectiveannualinterestrate? Theeffectiveannualrateistherateofinterestthatyouactuallyreceiveonyoursavingsafterinclusionofcompounding.Whencompoundingofinteresttakes place,theeffectiveannualratebecomeshigherthanthenominal annualinterestrate..Themoretimestheinterestiscompoundedwithintheyear,the highertheeffectiveannualratewillbe. Furtherreading Youcanlearnmoreaboutthepowerofinterestcompoundinginourarticle,whatiscompoundinterest? CalculatorcreatedbyAlastairHazellandreviewedbyJamesWhittington. Calculatorreferences: EdwardHubbard,PercivalMatthews&AnyaSamek(2016)Usingonlinecompoundinteresttoolstoimprovefinancialliteracy,TheJournalofEconomicEducation,47:2,106-120,DOI:10.1080/00220485.2016.1146097 Theemergenceofcompoundinterest,BritishActuarialJournal,2019 reportthisad Financearticles SavingTipsforYoungPeopleWhatistheDifferenceBetweenNominal,EffectiveandAPRInterestRates?WhatisFinancialIndependence,RetireEarly(FIRE)?HowtoCalculateNetIncome(WithExamples)HowLongWillItTakeToSave?(IncludesCalculator) reportthisad aboutus |  advertise |  forums |  cookieuse |  disclaimer |  privacy Giveourcompoundinterestcalculatoratry. HazellIndustriesLtd,12StationSt,Eastbourne,BN214RG ©HazellIndustriesLtd-2021