Curious to know how much your Fidelity SPAXX money market, Roth IRA, 401k or other investment account balances could grow thru the magic of compound interest?
Compound Interest Calculator
A compound interest calculator is a powerful and essential tool for anyone planning retirement savings, education funds, or any other long-term financial goals. By calculating compound interest, Fidelity investors can understand how to maximize their investments to grow over time, by seeing how re-investing interest leads to exponential growth (as interest is earned not only on the initial principal but also on accumulated interest from previous periods).
Compound Interest Calculator
By using this calculator, you can visualize how small changes in interest rates or contribution amounts affect long-term growth. To use this compound interest calculator effectively:
- Enter your initial investment amount (principal): This is the amount of money you start with.
- Input the interest rate: This is the annualized interest rate at which your investment grows.
- Choose the compounding frequency: Interest can be compounded annually, quarterly, monthly, or even daily. The more frequently interest is compounded, the faster your investment grows. (This is sometimes referred to as the ‘investment time horizon’).
- Set the investment duration: Enter the number of years you plan to keep your investment growing.
- Additional contributions (optional): You can also factor in regular contributions to see how adding to your principal over time impacts growth.
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