Investment Projection

Total Future Value
$0.00
Principal Amount
$0.00
Total Interest Earned
$0.00

Compound interest allows your money to grow faster because you earn interest not only on your initial amount but also on the accumulated interest over time. The more frequent the compounding, the higher your returns.

Formula Used

The compound interest formula is:

FV = P × (1 + r/n)n × t

  • FV = Future Value
  • P = Principal Amount
  • r = Annual Interest Rate (decimal)
  • n = Number of compounding periods per year
  • t = Time in years

Example with your inputs

  • Principal Amount: $10,000
  • Annual Interest Rate: 8%
  • Tenure: 10 years
  • Compounding Frequency: Annually

Investment Projection:

  • Total Future Value: $21,589.25
  • Principal Amount: $10,000.00
  • Total Interest Earned: $11,589.25

Why compound interest matters?

  • Exponential growth: Your money multiplies over time.
  • Frequency impact: More compounding periods (like daily) = higher returns.
  • Time advantage: The earlier you invest, the greater the effect.

How to use this calculator

  1. Enter your principal amount.
  2. Enter the annual interest rate.
  3. Choose your tenure in years.
  4. Select the compounding frequency (daily, monthly, quarterly, annually).
  5. The calculator will show the future value and interest earned.

Frequently Asked Questions (FAQ)

Does daily compounding give higher returns than annual compounding?

Yes. The more frequent the compounding (daily, monthly), the higher the returns compared to annual compounding. However, the difference is smaller over shorter periods.

How is compound interest different from simple interest?

Simple interest is earned only on the original principal, while compound interest is earned on both the principal and accumulated interest.

What happens if I invest for a longer time with compound interest?

The longer you stay invested, the more significant the compounding effect. Over decades, your money can grow several times the initial amount.

Can compound interest make me rich?

Yes, when combined with consistent investing and time. It’s often called the “eighth wonder of the world” because of its ability to multiply wealth over time.