Question 1

How do I calculate compound interest manually?

Accepted Answer

Multiply principal by (1 + r / n)^(n × t), where r is the annual rate and n is compounding periods. Subtract the original principal to isolate interest.

Question 2

What’s the difference between APR and APY?

Accepted Answer

APR is the nominal yearly rate without compounding. APY includes the effect of compounding, so APY is higher when interest is posted more than once per year.

Question 3

Is daily compounding better than monthly?

Accepted Answer

Daily compounding posts interest 365 times versus 12 for monthly, so balances end slightly higher over long horizons or at higher rates.

Question 4

How long will it take for my money to double?

Accepted Answer

Use the Rule of 72 as a shortcut: divide 72 by your annual rate. The calculator refines this using your frequency, contributions, inflation, and taxes.

Question 5

What is a good interest rate?

Accepted Answer

High-yield savings may pay around 4–5% APY. Diversified index portfolios historically return 6–9% over decades with volatility, while bonds and CDs are steadier but lower.

Question 6

Can I lose money with compound interest?

Accepted Answer

Yes, if the underlying investment falls or if fees and taxes outweigh gains. Use conservative assumptions, diversify, and review after-tax, inflation-adjusted results.

Question 7

How often should I contribute to maximize growth?

Accepted Answer

Automating monthly or biweekly contributions builds consistency and increases the compounding base. Even small recurring deposits add up over time.

Question 8

Can I use this for loans or inflation planning?

Accepted Answer

Yes. Treat principal as the balance and contributions as payments for loans, or add inflation to estimate real purchasing power for savings and retirement goals.


	2–4% APY
	6–8% CAGR
	3–5% coupon
	5–7% blended