Compound Interest
Learning Center
Everything you need to understand how compound interest works, why it's so powerful, and how to use it to build wealth over time. Published by Origin Software, the makers of CompoundFX.
Getting Started
Learn the fundamentals of compound interest.
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Simple vs. Compound Interest: Key Differences
Simple interest pays only on your principal; compound interest pays on principal plus past interest. See the gap grow over 10, 20, and 30 years.
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What Is Compound Interest?
Compound interest is interest earned on both your original money and its past earnings. Learn how it works with a simple worked example.
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Compounding Frequency
See how often interest compounds can impact your results.
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How Compounding Frequency Impacts Growth
More frequent compounding earns more, with sharply diminishing returns. Annual to continuous compared, APR vs APY, and what daily compounding is worth.
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Key Factors That Matter
The main variables that drive your results.
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The Power of Starting Early: Why Investing at 25 Beats 35
Starting at 25 instead of 35 costs $24,000 more in contributions but ends with roughly $281,000 more at 65. See the age 25/35/45 comparison, computed.
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Advanced Concepts
Take your understanding to the next level.
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Inflation and Real Returns
A real return is your growth after inflation. The Fisher equation: why 7% nominal at 3% inflation is really 3.88%, and what it does to buying power.
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Taxes and Compound Interest: Understanding Tax Drag
Annual taxes on gains cut the rate your money compounds at: a 7% return taxed hypothetically at 25% compounds like 5.25%. See the 30-year gap, computed.
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Put Your Knowledge into Action
See how these concepts work in real life. Model different scenarios with our free calculator.
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