This chart enables you to observe and compare the effects of the nominal rate of interest and the compounding frequency on the future value of a single payment ($100). Enter three pairs of values for the nominal rate of interest and number of compoundings per year. The chart will display the future value of $100 at each interest rate after 5, 10, 15, 20, and 25 years. To observe the effect of the compounding frequency, enter the same nominal rate for all three cases, but differing values for the compounding frequency.
Future Value of $100
Future Value of $100 Definitions
- Nominal annual interest rate
- The annual interest rate for your investment. This rate is divided by the number of compoundings per year to determine your periodic interest rate.
- Compounds per year
- Interest on an investment's interest, plus previous interest. The more frequently this occurs, the sooner your accumulated interest will generate additional interest. You should check with your financial institution to find out how often interest is being compounded on your particular investment.