Compound Interest

What does compounding do to a lump sum?

Amount invested $10,000

Interest rate 5.00%

Years 10 yrs

Worth after 10 years

–

Move a slider to see the difference.

Amount invested –

Compound interest (before tax) –

The same 5.00%, compounded three ways
Compounded	Effective yield a year	Worth after 10 years
Annually	–	–
Monthly	–	–
Daily	–	–

The headline compounds monthly. Effective yield is (1 + rate ÷ compounding periods)^periods The headline compounds monthly. How often interest compoundsminus; 1, with daily compounding over 365 days a year. How often interest compounds changes the result far less than the rate or the time — the three rows show it. Interest is shown before tax, at one rate for the whole period, with nothing added or withdrawn. Indicative only. Not financial advice.