Full disclaimer. This tool is here purely as a service to you, please use it at your own risk. Compound interest is calculated using the compound interest formula. To calculate your future value, multiply your initial balance by one plus the annual interest rate raised to the power of the number of compound periods. Subtract the initial balance if you want just the compounded interest figure. You can use a compound interest calculator to create a projection of how much your savings or investments might grow over a period of time using the power of compound interest.
We have a separate article discussing variations of the compound interest formula , should you be interested. Our interest calculator gives you a future balance and a projected monthly and yearly breakdown for the time period. Here's how to use it:. You can use the results as a guide to create a saving strategy to maximise your future wealth.
The concept of compound interest, or 'interest on interest', is that accumulated interest is added back onto your principal sum, with future interest calculations being carried out on the total of both the original principal and already-accrued interest. According to an article published in the Journal of Economic Education in , less than one-third of the U.
The idea of compound interest has been around a long time, with limited evidence suggesting ancient civilizations may even have known about it. At the Louvre in Paris, there exists a clay tablet from Babylon, possibly dating from between to B.
However, it seems likely that it wasn't until medieval times that mathematicians began to analyse compound interest fully 2. Your first 10 years might look like this:. A simple interest calculation takes a sum of money principal and calculates regular interest on that amount, without the effect of compounding. This is in direct contrast to compound interest, where accumulated interest is added back to the principal for each calculation, so that you effectively earn interest on already accumulated interest.
It is this difference that makes the simple interest calculation widely regarded as least advantageous to savers and most advantageous to borrowers. Should you wish to include compound interest in your calculations, you can use either our savings calculator or loan calculator.
To use our simple interest calculator, enter your starting balance, along with the annual interest rate and the start date assuming it isn't today. Then, enter a number of years, months or days that you wish to calculate for. Once you click the 'calculate' button, the simple interest calculator will show you:. Warning: It is necessary to enable JavaScript for full calculator functionality. Here are some instructions for how to enable JavaScript in your browser.
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Select an investment style and risk level and our in-house investment team will manage a globally diversified portfolio on your behalf. Bring all of your ISA investments under one roof. Our team of specialists can help answer any questions you may have. Calculate the impact of compound returns. About this projection. Period Years.
Period Monthly. Compounding period. Open or Transfer an ISA.
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