8 min read
2026-01-25
Sound calculation is the foundation of successful investing. Understanding returns and risks helps make informed decisions.
Compound interest is the accrual of interest not only on the initial amount but also on the accumulated interest. Formula: **FV = PV x (1 + r)^n**, where FV is future value, PV is present value, r is the rate, n is the number of periods.
| Year | Simple Interest | Compound Interest |
|---|---|---|
| 5 | $1,500 | $1,611 |
| 10 | $2,000 | $2,594 |
| 20 | $3,000 | $6,728 |
| 30 | $4,000 | $17,449 |
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Past returns do not guarantee future performance. Diversify your investments and account for inflation.
See also: Inflation Calculator, Retirement Calculator, Deposit Calculator