Benefits of Compound Interest
I believe that pictures can be very helpful in aiding our understanding of complex concepts. The power of compound interest is no exception. It becomes much easier to comprehend when you look at a graph of long-term growth.
To illustrate, let’s consider an example graph of an initial investment of $1,000. We will assume a longer investment period of 20 years, with an annual interest rate of 10%, to keep things simple.
By comparing the compound interest line in our graph to those for standard interest and no interest at all, it becomes clear how compound interest can significantly increase the value of an investment over time.
Compound Interest Calculator
Our Online Compound Interest Calculator tool can help you calculate the future value of your investment considering compound interest.