How Do Investments Grow Over Time? Find Out Using Our Simple Compound Interest Rate Calculator!
Why do I enjoy working with Millennials and Generations X and Y on the topic of investing and financial planning? Because there is tremendous long term value for a client to begin saving and investing early.
Just how beneficial is starting to save and invest at an early age?
Now you can find out for yourself with our simple compound interest rate investment calculator. Compare up to 3 different investments with different initial amounts, annual contributions, growth rates and duration.
In the example below, notice that an investor who saves for 25 years can save significantly less, and earn a much lower (and likely safer) rate of return and still end up with slightly more money than an investor with only a 20 year horizon.
Even better - a 25 year old today will more than likely have a 50+ year time horizon! Try the calculator yourself and see how saving for 50+ years changes the total!
To use, simply type in the desired amounts into the grey cells in the calculator below:
In case the terms used in the calculator are not clear:
Initial Investment – The amount of money to start your investment.
Annual Additions – This is the amount of additional money you contribute to the investment each year.
Growth Rate – This is the rate that your investments grow each year. This is your compounding interest rate.
Duration – This is how long your investment compounds at your specified growth rate.
Of course, this compound interest rate calculator simplifies things quite a bit. No equity investment will appreciate at the same exact percentage every year. Stocks will be up 30% and down 30%, but over time have averaged to about a 6.6% gain over the last 60 years, not including dividends. This calculator should not be used to make any investment decisions, and is displayed for educational and entertainment purposes only.