What is Compound Interest?
Compound interest is interest earned on both the original principal and accumulated interest. As a result, the balance can grow faster than with simple interest.
Different Compounding Frequencies
The same nominal annual interest rate can produce different effective annual results depending on how often interest is compounded. Daily, monthly, quarterly and annual compounding are common examples.
Interest Rate Conversion
This calculator converts a stated rate from one compounding frequency to an equivalent rate under another frequency. This makes it easier to compare financial products that use different compounding conventions.
Continuous Compounding
Continuous compounding is the mathematical limit of increasingly frequent compounding. It is calculated using the exponential function and is useful when comparing theoretical growth models.
Rule of 72
The Rule of 72 is a quick estimation method for how long a fixed-rate investment may take to double. Divide 72 by the annual percentage rate for a rough estimate. It is a shortcut, not an exact calculation.