Forecast investment growth, future value, and total accumulated compound interest with regular deposits.
| Year | Starting Balance | Annual Deposits | Interest Earned | Total Interest Earned | Ending Balance |
|---|---|---|---|---|---|
| Year 1 | $5,000 | +$2,400 | +$488 | $488 | $7,888 |
| Year 2 | $7,888 | +$2,400 | +$712 | $1,200 | $11,000 |
| Year 3 | $11,000 | +$2,400 | +$954 | $2,154 | $14,354 |
| Year 4 | $14,354 | +$2,400 | +$1,214 | $3,368 | $17,968 |
| Year 5 | $17,968 | +$2,400 | +$1,495 | $4,863 | $21,863 |
| Year 6 | $21,863 | +$2,400 | +$1,797 | $6,660 | $26,060 |
| Year 7 | $26,060 | +$2,400 | +$2,123 | $8,782 | $30,582 |
| Year 8 | $30,582 | +$2,400 | +$2,474 | $11,256 | $35,456 |
| Year 9 | $35,456 | +$2,400 | +$2,852 | $14,109 | $40,709 |
| Year 10 | $40,709 | +$2,400 | +$3,260 | $17,369 | $46,369 |
Compound interest is interest calculated on the initial principal, which also includes all the accumulated interest from previous periods. In simple terms, it is "interest on interest".
The standard mathematical formula for compound interest is:
Where A is future value, P is starting principal, r is annual interest rate (decimal), n is compounding frequency, t is time in years, and PMT is regular periodic deposit.