What is compound interest?

Compound interest is interest calculated on both the initial principal and accumulated interest from previous periods. For savings, it helps your money grow faster. For debt, it increases what you owe.

What is a good return rate for savings in Canada?

Conservative TFSA/RRSP investments typically earn 5-7% annually, while the S&P 500 historical average is around 10%. High-interest savings accounts offer 4-5%.

How is credit card interest calculated?

Credit card interest in Canada averages 19.99% APR, compounded daily. This means interest charges are added to your balance each day, increasing the total amount owed.

Compound Interest Calculator

See the power of compound interest — for savings or debt

Investment Details

Starting Amount

Monthly Contribution

Annual Return Rate

S&P 500 historical avg: ~10%, TFSA/RRSP conservative: 5-7%

Time Period (Years)

Results

Final Balance After 10 Years

$44,665

Your Contributions$29,000

Interest Earned$15,665

Monthly Contribution$200

💡 Key Insight: Your $200/month grows to $44,665 — that's 54% growth from compound interest!

💰 The Power of Compound Interest

✅ Saving $200/month

$44,665

after 10 years at 7.00%

⚠️ Owing $5,000 at 7.00%

$5,600

total cost with $200/month payments

Bottom line: The same $200/month can either grow your wealth or pay off expensive debt. Choose wisely! 🌱

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