Compound Interest Calculator

The Magic of Compound Interest

Unlike simple interest where the rate applies only to the initial money, incompound interestthe rate is applied to the initial moneyplus the interest from previous months. This creates the famous 'snowball' effect or 'interest on interest,' which is the main factor responsible for wealth accumulation in the financial market in the long term.

Example of growth:

If you have R$ 1,000 earning 10% per month:

• Month 1:10% of 1,000 = R$ 100 profit (Balance: R$ 1,100)
• Month 2:10% of 1,100 = R$ 110 profit (Balance: R$ 1,210)
• Month 3:10% of 1,210 = R$ 121 profit (Balance: R$ 1,331)

Note that in month 3, you didn't just earn the original 100 reais, you earned 121 reais. Over 10 or 20 years, this small monthly increase makes your graph skyrocket in a steep upward curve. Test it in our calculator by changing the period from months to years and watch the magic happen!