compound interest calculator

When it comes to building wealth reliably, the secret ingredient isn’t the suitability of stocks or a complicated budget, it’s time.

Legendary investor Warren Buffett called compound interest an investor’s best friend. This is because compound interest grows faster than simple interest because it allows you to profit not only from your initial investment, but also from the accumulated interest. And the more your money has to grow, the more interest you can earn.

Buffett likened compound interest to a snowball that grows by rolling down a hill, and said investors should start using compound interest as early as possible.

“I started building this little snowball on top of a very long hill,” Buffett, whose fortune exceeds $120 billion, said in 1999. .”

To illustrate the power of compound interest, here’s a calculator you can use to see how your money grows under different circumstances.

You can try different contribution amounts with different average interest rates over a wide range of time periods. Just type in the desired number and perform the calculation.