Visualize how your investments grow with compound interest over time
Compound interest is the process where your investment earns interest, and then that interest also earns interest over time. This creates a snowball effect that can significantly grow your money.
The formula used in this calculator is: A = P × (1 + r/100)n
Where:
For example, with an initial investment of $1,000 at 5% annual interest for 10 years, your investment would grow to $1,628.89, earning $628.89 in interest.
The key takeaway: The earlier you start investing, the more time compound interest has to work its magic!