The Power of Compound Interest: How Money Multiplies Over Time

What is Compound Interest?

Albert Einstein famously called compound interest the 'eighth wonder of the world'. Compounding means earning interest not only on your original principal, but also on accumulated interest from previous periods.

Simple vs Compound Interest Comparison

• Simple Interest: Calculated only on initial principal amount.
• Compound Interest: Interest accumulates on principal plus previous interest, accelerating growth over time like a snowball.

The Rule of 72

To estimate how many years it takes to double your money, divide 72 by annual interest rate percentage.

Example: At an 8% annual return: 72 ÷ 8 = 9 years to double your investment.

Calculate Compound Growth Instantly

Use Toolsera's free Compound Interest Calculator to project your future portfolio value year by year.