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Compound Interest & APY Studio

Simulate exponential compounding, recurring deposit contributions, effective APY yields, and Rule of 72 doubling timelines in local browser RAM.

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Add recurring capital to compounding

Years
Accumulated Terminal Maturity ($A$) 0.00% Effective APY
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Total Principal Invested ₹0
Total Accrued Interest ₹0
Rule of 72 Doubling Time 0.0 Yrs
Deposited Compounded Balance
Exponential Compounding Trajectory

🏁 Portfolio Multiplication Milestones

100% Deterministic Local RAM

Annual Compound Accrual Schedule

Detailed breakdown of opening balances, annual deposits, generated interest, and year-end wealth.

Year Opening Principal Annual Added Interest Earned Closing Balance

The Mathematical Power of Exponential Compound Interest & Effective APY

Compound interest represents interest computed not solely on the primary initial investment sum, but on the cumulative interest generated across previous compounding intervals. While simple interest grows linearly, compound interest curves exponentially over extended holding tenures.

1. Continuous Compounding Formula with Periodic Deposits

When an initial principal ($P$) compounds at a nominal annual rate ($r$) across frequency ($n$) with regular recurring monthly deposits ($PMT$), the cumulative future maturity amount ($A$) is formulated as:

$$A = P \left(1 + \frac{r}{n}\right)^{n \cdot t} + PMT \times \frac{\left(1 + \frac{r}{n}\right)^{n \cdot t} - 1}{\frac{r}{n}}$$

2. Annual Percentage Rate (APR) vs. Annual Percentage Yield (APY)

The nominal Annual Percentage Rate (APR) states the headline interest figure, but ignores intra-year reinvestment. The Annual Percentage Yield (APY) accounts for compounding frequency, measuring true annualized return:

$$\text{APY} = \left(1 + \frac{r}{n}\right)^n - 1$$

For instance, a nominal 12% APR compounded daily ($n = 365$) yields an effective APY of 12.747%, generating substantial incremental wealth over long horizons.

3. The Rule of 72 Doubling Principle

The Rule of 72 provides a quick logarithmic approximation for determining how many years ($t_{\text{double}}$) an asset requires to multiply $2\times$ at a fixed compounding rate:

$$t_{\text{double}} \approx \frac{72}{\text{Interest Rate (\%) }}$$

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Frequently Asked Questions

How does daily compounding compare to annual compounding?

Daily compounding applies interest 365 times per year, generating slightly higher compound yield than quarterly or annual compounding due to immediate interest reinvestment.

Are my financial numbers recorded or sent to any server?

No. All calculations, matrices, and charts render locally inside your browser's execution memory (RAM). No data ever leaves your device.

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