Question 1

What is compound interest?

Accepted Answer

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, it causes wealth to grow exponentially over time — which is why Albert Einstein reportedly called it the eighth wonder of the world.

Question 2

How does compounding frequency affect returns?

Accepted Answer

More frequent compounding results in higher effective returns. For example, $10,000 at 12% annual rate for 10 years: annual compounding gives $31,058, while monthly compounding gives $33,004 — an extra $1,946 just from compounding more often.

Question 3

What is the compound interest formula?

Accepted Answer

A = P × (1 + r/n)^(n×t), where A = final amount, P = principal, r = annual interest rate (decimal), n = compounding frequency per year, t = time in years.

Question 4

How do I download my compound interest calculation?

Accepted Answer

After computing your results, click the green 'Download CSV' button to save the full year-by-year table as a spreadsheet. You can also click 'Print / Save PDF' to get a printable version.

Compounding Magic