Compound Interest Savings Calculator
Project the future value of your savings with compound interest. Features a breakdown of principal vs. interest earned over time.
About
Compound interest is the mechanism by which interest is earned on both the initial principal and the accumulated interest from previous periods. This exponential growth factor distinguishes investing from simple saving. For long-term wealth accumulation, the frequency of compounding (how often the interest is added to the balance) can significantly alter the final outcome.
This calculator employs the standard compound interest formula to project future value. It distinguishes between the "Total Principal" (money you deposited) and "Total Interest" (free money generated by time and rate). Understanding this split is vital for retirement planning and evaluating high-yield savings accounts.
Formulas
The core formula for compound interest:
To find the interest earned purely from compounding:
Reference Data
| Variable | Symbol | Standard Definition |
|---|---|---|
| Future Value | A | The total value of the investment after t years. |
| Principal | P | The initial deposit or starting amount. |
| Annual Rate | r | The interest rate (decimal). 5% = 0.05. |
| Frequency | n | Times compounded per year (Monthly=12, Daily=365). |