![]() ![]() Therefore, a shorter compounded period will help you grow your investment faster because the interest calculation is done on the recent capitalized amount which will include the added interest income. For example, if the program you're investing in says it is monthly compound interest, it means that you will get 1/12 of the yearly interest income every month. If the interest income is capitalized multiple times a year, then a portion of the yearly interest will be capitalized and reinvested. If your investment gives an annual compound interest, 100% of the interest income will be cashed yearly and then reinvested. Simple interest is not widely used and therefore ignored in this calculator. From mortgages to retirement plans, our calculators allow you to estimate the value of a loan or deposit from just about every financial product you might. The other type of interest is simple interest, which capitalizes only the amount invested and doesn’t reinvest the interest income. Future value is an important concept in the world of investments. Whereas if you choose to take the money after 5 years, the future value of the amount will be £10,000 after 5 years, because the money has not grown. Compound interest implicates adding the interest income to your investment, and then reinvesting it, every time, as opposed to withdrawing it. Example 1: At an annual interest rate of 5, the future value of £10,000 after 5 years will be £12,782.82. You can choose the interest rate and the moment its generated income will be cashed (monthly, quarterly, semi-annually or yearly), which is also known as compound interest. This can depend on your type of income yearly bonus, quarterly commission or weekly salary, for example. Simply insert the amount you are ready to invest now and/or the additional amount you plan to inject periodically (weekly, bi-weekly, monthly, quarterly, semi-annually or yearly) and then choose the period that best matches your situation (some may be better off with bigger amounts at larger intervals while others might prefer smaller amounts at shorter intervals). Whether you have a specific goal or simply want to know how much interest you will gain, this investment calculator will help you find out the future value of your investment.
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