✨ The 8th Wonder
Simple vs Compound Interest
See the math behind the most powerful force in finance.
💰 Your Numbers
✨ Compounding Magic
Simple Interest
Compound Interest
Compound Bonus
extra from compounding
📈 Year-by-Year Comparison
💡 The Compounding Insight
📌 5 Compounding Rules
- ✓ Start NOW — the most powerful variable is time. $100/month for 10 years beats $200/month for 5 years.
- ✓ Reinvest everything — don't take dividends, interest, or capital gains out. Reinvest them to compound.
- ✓ Avoid debt that compounds against you — credit cards at 24% APR compound daily. Pay them off FIRST.
- ✓ Higher frequency = slightly more — daily compounding earns marginally more than annual, but the difference is small.
- ✓ Compounding cuts both ways — a 24% APR credit card debt doubles in 3 years. Use the same force FOR you with investments.
Disclaimer: This calculator uses a fixed annual return for illustration. Actual investment returns vary significantly year to year. This is educational — not financial advice.