Calculate the future value of investments with compound interest using FV = PV(1+r)^n
$1,000 at 5% for 10 years
$5,000 at 8% for 20 years
The future value of an investment with compound interest:
Where:
Compound interest means interest is earned on both the principal and previously earned interest.
The longer the time period, the greater the effect of compounding.
Higher interest rates lead to faster growth over time.