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Advanced Compound Interest Calculator | Financial Planning Tool

Compound Interest Calculator

Estimate growth over time. Enter principal, annual rate, and years, then click Calculate.

See the power of compounding with customizable investment scenarios.

Introduction to the Compound Interest Calculator

A Compound Interest Calculator helps you compute the interest earned on an investment or loan, where the interest itself earns interest. It considers the principal amount, interest rate, time, and contributions. This tool visually demonstrates your investment’s growth by compounding interest periodically, offering a clear financial projection.

Calculator and Results

Investment Details

Core Investment Inputs

The amount you plan to invest initially.

Your expected annual return.

How many years you plan to invest.

How often the interest is calculated.

Additional Contributions

Additional Contribution Inputs

The amount you’ll add periodically.

How often you’ll make these additions.

Advanced Settings

Advanced Inputs for Inflation and Taxes

Adjusts future value for purchasing power.

Your marginal tax rate on earnings.

Results

Enter details and click “Calculate” to see your results.

Understanding Compound Interest

How to Use the Calculator

Follow these simple steps to project your investment growth:

  1. Enter Initial Investment: The lump sum you’re starting with.
  2. Set Annual Interest Rate: Your expected annual return (e.g., 8% for market average).
  3. Choose Investment Period: The number of years you plan to invest.
  4. Select Compounding Frequency: How often interest is calculated. More frequent compounding yields better results.
  5. Add Contribution Details: If you plan to make regular investments, enter the amount and frequency.
  6. Adjust Advanced Settings: Include inflation and taxes for more realistic projections.
  7. Click “Calculate”: Review your results in the summary, table, or metrics tabs.

The Formula Explained

The formula for compound interest with regular contributions is:

A = P(1 + r/n)nt + PMT × [((1 + r/n)nt – 1) / (r/n)]

Where:

  • A = Final amount
  • P = Principal (initial investment)
  • r = Annual interest rate (decimal)
  • n = Compounding periods per year
  • t = Time in years
  • PMT = Regular payment amount

Frequently Asked Questions

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