Compound interest explained

Last updated: 2026-08-14

Compound interest means growth can earn additional growth over time. The longer money stays invested or saved, the more the timing and rate assumptions matter.

The main inputs

Starting balance, regular contribution, interest or return rate, compounding frequency, and time horizon all affect the future value.

Why time matters

More time gives contributions and growth more periods to compound. Small rate differences can become large over long horizons.

Use the calculator

Use the compound interest calculator for a focused growth estimate and the investment return calculator for fees, tax, and inflation assumptions.