How to Use This Compound Interest Calculator
Compound interest is the process where the interest you earn on your investment earns interest itself. Over time, this creates an exponential growth curve.
The Power of Time
The variable T (Time) is the most powerful factor in this equation. As shown in the graph above, the curve becomes much steeper in the later years. This is why financial advisors recommend starting as early as possible.
The Formula Used
We use the standard compound interest formula with monthly contributions:
A = P(1 + r/n)^(nt) ...
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Regular contributions, even small ones, can significantly alter your final outcome compared to a lump sum investment alone.