Compound Growth & Yield Calculator
Project the future value of your capital over time.
Investment Projection
Total Future Balance:
Total Yield Earned:
Understanding Capital Growth and Yield
Calculating the potential growth of your assets is a fundamental step in long-term financial planning. Unlike simple growth, which only calculates returns based on the original sum, compound growth allows your earnings to generate their own returns over time. This creates an exponential curve that can significantly increase your wealth over decades.
How the Calculation Works
This calculator uses the standard mathematical formula for compound returns:
- P: The initial capital you start with.
- r: The annual yield percentage (converted to a decimal).
- n: The number of times the yield is applied per year.
- t: The total number of years the capital is held.
Realistic Example of Compounding
Imagine you begin with an Initial Capital of 10,000. If you achieve an Annual Yield of 8% and hold the assets for 20 years with monthly compounding, the results would be as follows:
| Metric | Value |
|---|---|
| Principal Amount | 10,000.00 |
| Total Yield (Profit) | 39,268.09 |
| Final Portfolio Value | 49,268.09 |
The Importance of Frequency
The "Compounding Frequency" plays a subtle but vital role. Daily compounding generates more returns than annual compounding because the yield is recalculated on an ever-increasing balance more frequently. Even with the same Annual Yield, the actual profit will vary depending on whether the yield is applied monthly, quarterly, or yearly.