The Power of Compounding

Compound interest is often referred to as the “eighth wonder of the world.” Unlike simple interest, which only calculates returns on your initial principal, compound interest calculates returns on your principal plus any interest you’ve already earned. This creates a “snowball effect” where your wealth grows exponentially over time.

How to Maximize Your Returns

Our Compound Interest Calculator helps you visualize three key factors that dictate your future wealth:

• Time: The longer you leave your money invested, the more time compounding has to work its magic. Starting just 5 years earlier can result in hundreds of thousands of dollars in extra wealth.
• Frequency: Interest that compounds monthly grows faster than interest that compounds annually. The more frequently interest is added back to your balance, the faster your principal expands.
• Contributions: Even small monthly additions (like $100 or $200) drastically shift the curve of your growth, as those new deposits immediately begin earning their own interest.