Compound Growth Calculator
Calculate the final value and total growth with compound interest.
Formulas
Compound growth formula. Universal mathematical relationship, no jurisdiction dependency.
final_value = principal * (1 + rate) ^ periods; growth_amount = final_value - principal
Assumptions and limitations
Scope
Calculate growth with compounding per period. Applicable to fixed-rate investments, savings, cumulative inflation, and exponential growth models.
Assumptions
- Compound growth formula. Universal mathematical relationship, no jurisdiction dependency.
Limitations
- Assume tasso costante per tutti i periodi: non valido per tassi variabili
- Non considera inflazione, commissioni di gestione o prelievi intermedi
- La capitalizzazione annua produce risultati diversi dalla capitalizzazione mensile o continua
- Non calcola rendimenti reali (al netto dell'inflazione)
Validation
Approach: Validated by verifying the declared formula and plausibility checks (range, units, edge cases).
Examples
Long-term savings
- €10.000 al 5% per 20 anni → €26.533. Il guadagno netto è €16.533, pari al 165% del capitale iniziale. La maggior parte della crescita si concentra negli ultimi anni.
Impact of a low rate
- €5.000 al 2% per 10 anni → €6.095. Guadagno netto €1.095: il tasso basso limita fortemente l'effetto dell'interesse composto.
Frequently asked questions
How does the rule of 72 work?
Divide 72 by the annual percentage rate to estimate the years needed to double the capital. E.g.: at a 6% rate, the capital doubles in about 12 years (72/6=12). It's a valid approximation between 2% and 15%; outside this range the result is less accurate.
Should the rate be entered as a whole number or decimal?
As a decimal. A 5% rate should be entered as 0.05. A 3.5% rate as 0.035. Entering 5 instead of 0.05 would indicate 500% annual growth, producing a completely incorrect result.
What's the difference between simple and compound interest?
With simple interest, interest doesn't compound: €1,000 at 5% for 10 years gives €500 total interest. With compound interest, interest earns interest: the same example gives €629 (63% more). The difference grows exponentially over time.