See how your money grows with compound interest over time
Projects the future value of an investment or loan when interest accrues on both the principal and the previously earned interest. The more frequently compounding occurs, the faster the balance grows.
A = P × (1 + r/n)^(n·t)
Afinal amountPprincipal (initial amount)rannual interest rate (decimal)ncompounding periods per yearttime in yearsCompound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It makes your money grow faster than simple interest.
A = P(1 + r/n)^(nt), where A is the final amount, P is principal, r is annual interest rate, n is compounding frequency per year, and t is time in years.
More frequent compounding (daily vs. yearly) generates slightly more interest because interest is calculated on a growing balance more often. The difference is more noticeable at higher rates and over longer periods.
The Rule of 72 is a quick estimate: divide 72 by the annual interest rate to approximate how many years it takes for an investment to double. At 8% interest, money doubles in roughly 72/8 = 9 years.