Compound Interest Calculator!
The first thing to consider with all personal finance is the idea of compound interest! This is what separates the “Piggy Bank” savers from the Warren Buffets; making use of interest compounding is how you can really make your savings grow!
If you have already used our Investment Return Calculator, you can use this calculator to see how different types of compounding will affect your overall return!
Once you can really see the impact of interest compounding and growth, try out our Credit Card Payments Calculator to see what happens when you are paying interest, not earning it!
| Chart Filters | |||
|---|---|---|---|
Report
| Initial Investment Amount | 10000 |
|---|---|
| Interest Rate | 5 |
| Total Years Invested | 10 |
Look at the chart above. Which interest compounding cadence gave you the highest return?
Interest that compounds more often will give you a better yield because interest is paid on the total sum, not just your initial investment. In other words, if you’ve gained 1 dollar from interest on a $100 investment, the interest paid on the next period will be on the $101 total. The more often it compounds, the more those small changes will add up!
This difference in actual returns per year depending on the compounding is referred to as Annual Percentage Yield or APY.
| Compounding | APY | Total Return |
|---|---|---|
| Annual | 5 | 10000 |
| Quarterly | 5 | 10000 |
| Monthly | 5 | 10000 |
| Daily | 5 | 10000 |