The future value formula
A = P (1 + r/n)n t, where P is principal, r is the annual rate as a decimal, n is compounds per year, and t is years. Monthly compounding uses n = 12; daily often uses 365.
Simple vs compound
Simple interest applies the rate only to the original principal. Compound interest reinvests earnings so the base grows each period — that is why long savings horizons matter.
Frequency
More frequent compounding (monthly vs annually) slightly increases future value for the same nominal rate. Compare presets in the compound interest calculator.
Limits of this tool
This MVP models a single lump-sum principal with no additional deposits, fees, or taxes. It is an educational projection, not investment advice.