This Compounding Calculator shows you how the interest you earn each year is added to your principal so that the balance doesn’t merely grow, it grows at an increasing rate. ... What is the value of compound interest? The calculator results show how your savings grow each year. An official website of the United States government. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. The formula for compound interest is P (1 + r/n)^(nt), where P is the initial principal balance, r is the interest rate, n is the number of times interest is compounded per time period and t is the number of time periods. To configure the function, we need to provide a rate, the number of periods, the periodic payment, the present value. Calculate compound interest on an investment or savings. Don't be deceived by more complex 401k calculators that include more variables. Annual Salary This is your annual salary from your employer before taxes and other benefit deductions. The "Daily" option uses the exact number of days between dates, but daily compounding is assumed. The present value is simply the amount of money that will be invested, i is the interest rate for each time interval, and n is the number of compounding intervals. I contribute 4% of incomw to the company 401k to capture the maximum match. A 401(k) retirement calculator can help you determine your savings goals each year between now and your target retirement date. 401k Calculator Payout.

Compounding may go a long way toward helping you with your retirement goals.