Simulate how your principal and monthly contributions grow with compound interest. Discover the magic of compounding over time.
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Simple interest is calculated only on the principal, while compound interest earns interest on both the principal and accumulated interest. The more frequently interest compounds (monthly, daily), the higher the final balance. The effect becomes dramatic over long periods.
A large initial principal benefits most from long compounding periods, while regular monthly contributions build investing habits and compound over time. The earlier you start, the more powerful monthly contributions become.
The S&P 500 has historically returned about 7% annually after inflation adjustment. Individual stocks or crypto may return more but with higher volatility. For broad index fund investing, 7% is a conservative long-term expectation.