Understanding Compound Interest
Compound interest is often called the "eighth wonder of the world". It is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.
How to use this calculator
- Initial Investment: The amount of money you start with.
- Monthly Contribution: How much you plan to add to your investment each month.
- Interest Rate: The annual estimated return on your investment.
- Duration: How many years you plan to let the money grow.
Use the "Load Example" button to see a demonstration of how a regular $500 monthly investment can grow over 20 years.