Future Compound Interest Calculator
This calculator allows you to calculate the growth of your investments at % per annum and the impact on the final result of periodic additions to the deposit. The starting amount can be 0.
What is compound interest?
The power of compound interest is so great that Albert Einstein once called it the most important invention in the history of humankind. This calculator helps you model the growth of investments over a long distance based on compounding % and the effect of periodic additions to the depositing body. You could enter a starting amount or leave this field blank and use only periodic purchases. As a basis, you can take the average annual % BTC from calculations in the Historical Calc BTC tab. Remember, distance matters.
A very nice illustration of exponential income growth is the story of two brothers, Michael and Alexander, who used different investment approaches. Imagine that Michael and Alexander are both 65 years old, at retirement age. Michael had gained an advantage by opening a savings account at the age of 20 and regularly contributed $4,000 annually for 20 years. At the age of 40, he stopped contributing funds and allowed the account to grow only through an interest rate of 10% per year.
It’s a slightly different story with Alexander, who opened his savings account at the age of 40 and was contributing $4,000 annually there for 25 years at the same 10% interest rate.
In total, Michael put $80,000 into his accounts, and Alexander $100,000. The question is, who will have more money in their account when they retire at 65 years? Michael, who had started investing earlier and stopped adding funds when Alexander had just started, would have made $2.5 million, while Alexander would have made less than $400,000! The 600% difference happened because Michael had 20 years more compound interest working for him.
This story highlights the importance of saving and investing as early as possible, even in small amounts. The sooner you start, the more time your money will have to grow and be compounded. So, don’t wait to start planning your financial future; start now.
Your financial future is less influenced by the size of your income and rather depends more highly on whether or not you’ve developed the habit of keeping a portion back for yourself.
The habit of investing even a small part (for example, 10% of your income) in something, how much of it you actually buy, and how much you hold on to for the long term are all influential factors. It’s an important factor to think about.
Determine an acceptable figure for how much you intend to save: 5, 10, 15 or 20% of your income are good examples. Of course, if it seems that there is no extra after you’ve paid your bills, it may not be possible to save. However, it’s worth keeping track of all your expenses and figuring out what you can give up in favor of reaching your bigger goal.
So, how much will it be? Is it $2, $5, $10, or $100 a day/week? That’s the amount you’ll pay and invest in your future.
— Write down and highlight this amount with color.
— Remember this amount.
— Dedicate yourself to not deviating from it.
— Keep your promise.
If the asset you have chosen is BTC, you can configure this to accumulate automatically on your exchange; also, you can do Dollar Cost Averaging with market indices, for example, SP500.
Whatever the value you set, always stay true to your decision, in good times and in bad. Why? Because the law of compound interest strongly punishes missed payments. It’s better to change the amount, but the main thing is not to stop accumulating assets; then, you will be able to rise to levels you could not even imagine.