Investment Details
Results
The Compound Interest Formula
Schedule
Year-by-year breakdown
| Year | Opening Balance | Contributions | Interest Earned | Closing Balance | Total Interest |
|---|
FAQ
Questions people usually have before trusting a growth projection
What is compound interest?
Interest calculated on the principal plus all accumulated interest. Unlike simple interest, it grows exponentially — your interest earns interest.
What is the compound interest formula?
A = P(1 + r/n)nt where: A = final amount, P = principal, r = annual interest rate (as a decimal), n = compounding periods per year, t = time in years. With regular contributions, each contribution is compounded for its remaining time and summed.
How does compounding frequency affect returns?
More frequent compounding produces slightly higher returns. Daily compounding on 10% annual rate gives an effective annual rate of 10.52%, while annual compounding gives exactly 10%. The difference widens with higher rates and longer periods.
What is the Effective Annual Rate (EAR)?
EAR = (1 + r/n)n − 1. It converts any compounding frequency to an equivalent annually compounded rate, making it easy to compare savings products with different compounding schedules.
What is the Rule of 72?
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 12% annual rate: 72 ÷ 12 = 6 years. It's an approximation but accurate within a few percent for rates between 6–20%.
Where can I earn compound interest in Nigeria?
Money market funds (Stanbic, ARM, Cowrywise — 18–22% p.a. 2026), CBN Treasury Bills, fixed deposits, and platforms like PiggyVest, Risevest and Bamboo. Weigh Naira returns against inflation and exchange rate risk.