Finance · Compound Interest
Watch your money compound.
Principal, annual rate, years, and compounding frequency. See the final balance and how much was just interest.
Advertisement
Inputs
Monthly is the default for mutual funds + most banks.
Receipts
Final balance
—
Interest earned
—
Effective annual rate
—
—
Advertisement
When this number lies
- This shows nominal growth, not inflation-adjusted real return. Subtract 3-4%/yr for real purchasing power.
- No taxes modelled. Capital gains, dividend tax, or interest tax will reduce the final number.
- Past returns don’t guarantee future ones. Treat 8% as a long-horizon equity assumption, not a promise.
How this is calculated
final = principal × (1 + rate/n)^(n × years)interest = final − principalear = (1 + rate/n)^n − 1- n = compounding periods per year
Advertisement