Compound Interest and Your Return

How interest is calculated can greatly affect your savings. The more often interest is compounded, or added to your account, the more you earn. This calculator demonstrates how compounding can affect your savings, and how interest on your interest really adds up!

Definitions

Investment Amount The amount of your initial investment. Annual Interest Rate The annual interest rate for your investment. The actual rate of return is largely dependent on the type of investments you select. For example, for the last thirty years the average annual rate of return for the TSX is about 10%. Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. Years Number of years for this investment. Yearly APY Annual percentage yield received if your investment is compounded yearly. Quarterly APY Annual percentage yield received if your investment is compounded quarterly. Monthly APY Annual percentage yield received if your investment is compounded monthly. Daily APY Annual percentage yield received if your investment is compounded daily.